BULL & BEAR FUNDS II INC, NSAR-A, 1998-02-27

BULL & BEAR FUNDS II INC
NSAR-A, 1998-02-27

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<PAGE> PAGE 1
000 A000000 12/31/97
000 C000000 0000015260
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000 I000000 3.0
000 J000000 A
001 A000000 BULL & BEAR FUNDS II, INC.
001 B000000 811-2474
001 C000000 2127850900
002 A000000 11 HANOVER SQUARE
002 B000000 NEW YORK
002 C000000 NY
002 D010000 10005
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007 C020100 BULL & BEAR DOLLAR RESERVES
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008 A00AA01 BULL & BEAR ADVISERS, INC.
008 B00AA01 A
008 C00AA01 801-28329
008 D01AA01 NEW YORK
008 D02AA01 NY
008 D03AA01 10005
011 A00AA01 INVESTOR SERVICE CENTER, INC.
011 B00AA01 8-29751
011 C01AA01 NEW YORK
011 C02AA01 NY
011 C03AA01 10005
012 A00AA01 DST SYSTEMS, INC.
012 B00AA01 84-00448
012 C01AA01 KANSAS CITY
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012 C03AA01 64105
013 A00AA01 TAIT, WELLER & BAKER
<PAGE> PAGE 2
013 B01AA01 PHILADELPHIA
013 B02AA01 PA
013 B03AA01 19102
014 A00AA01 BULL & BEAR SECURITIES, INC.
014 B00AA01 8-31732
015 A00AA01 INVESTORS FIDUCIARY TRUST COMPANY
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 7
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<PAGE> PAGE 9
SIGNATURE JOSEPH LEUNG
TITLE TREASURER

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Bull &
Bear Dollar Reserves Semi-Annual Report and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000015260
<NAME> Bull & Bear Funds II, Inc.
<SERIES>
<NUMBER> 001
<NAME> Bull & Bear Dollar Reserves Fund
<MULTIPLIER> 1
<CURRENCY> U.S. Dollar

<S> <C>
<PERIOD-TYPE> 6-Mos
<FISCAL-YEAR-END> Jun-30-1998
<PERIOD-START> Jul-01-1997
<PERIOD-END> Dec-31-1997
<EXCHANGE-RATE> 1.000
<INVESTMENTS-AT-COST> 60,955,910
<INVESTMENTS-AT-VALUE> 60,955,910
<RECEIVABLES> 687,334
<ASSETS-OTHER> 47,837
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 61,691,081
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 101,187
<TOTAL-LIABILITIES> 101,187
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 61,597,617
<SHARES-COMMON-STOCK> 61,547,885
<SHARES-COMMON-PRIOR> 62,838,416
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (7,723)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 61,589,894
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,776,582
<OTHER-INCOME> 0
<EXPENSES-NET> 255,642
<NET-INVESTMENT-INCOME> 1,520,940
<REALIZED-GAINS-CURRENT> 854
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1,521,794
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,549,290
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 26,095,222
<NUMBER-OF-SHARES-REDEEMED> 28,898,004
<SHARES-REINVESTED> 1,521,251
<NET-CHANGE-IN-ASSETS> (1,318,027)
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<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 158,450
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 372,368
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</TABLE>

FORM OF
CUSTODY AND INVESTMENT ACCOUNTING AGREEMENT

THIS AGREEMENT made the 25th day of April, 1997, by and between
INVESTORS FIDUCIARY TRUST COMPANY, a trust company chartered under the laws of
the state of Missouri, having its trust office located at l27 West 10th Street,
Kansas City, Missouri 64105 ("Custodian"), and each registered investment
company listed on Exhibit A hereto, as it may be amended from time to time, each
a having its principal office and place of business at 11 Hanover Square, New
York, NY 10005 (each a "Fund" and collectively the "Funds").

WITNESSETH:

WHEREAS, each Fund desires to appoint Investors Fiduciary Trust Company
as custodian of the securities and monies of such Fund's investment portfolio
and as its agent to perform certain investment accounting and recordkeeping
functions; and
WHEREAS, Investors Fiduciary Trust Company is willing to accept such
appointment;
NOW THEREFORE, for and in consideration of the mutual promises
contained herein, the parties hereto, intending to be legally bound, mutually
covenant and agree as follows:
1. APPOINTMENT OF CUSTODIAN. Each Fund hereby constitutes and appoints
Custodian as:
A. Custodian of the securities and monies at any time owned by the
Fund; and
B. Agent to perform certain accounting and recordkeeping
functions relating to portfolio transactions required of a
duly registered investment company under Rule 31a of the
Investment Company Act of 1940 (the "1940 Act") and to
calculate the net asset value of the Fund.
2. REPRESENTATIONS AND WARRANTIES.
A. Each Fund hereby represents, warrants and acknowledges to Custodian:
1. That it is a corporation duly organized and existing and in
good standing under the laws of its state of organization,
and that it is registered under the 1940 Act; and
2. That it has the requisite power and authority under
applicable law, its articles of incorporation and its
bylaws to enter into this Agreement; that it has
taken all requisite action necessary to appoint
Custodian as custodian and investment accounting and
recordkeeping agent for the Fund; that this

<PAGE>

Agreement has been duly executed and delivered by
Fund; and that this Agreement constitutes a legal,
valid and binding obligation of Fund, enforceable in
accordance with its terms.
B. Custodian hereby represents, warrants and acknowledges to the
Funds:
1. That it is a trust company duly organized and
existing and in good standing under the laws of the
State of Missouri; and
2. That it has the requisite power and authority under
applicable
law, its charter and its bylaws to enter into and
perform this Agreement; that this Agreement has been
duly executed and delivered by Custodian; and that
this Agreement constitutes a legal, valid and binding
obligation of Custodian, enforceable in accordance
with its terms.
3. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.
A. Delivery of Assets
Except as permitted by the 1940 Act, each Fund will deliver or
cause to be delivered to Custodian on the effective date of
this Agreement, or as soon thereafter as practicable, and from
time to time thereafter, all portfolio securities acquired by
it and monies then owned by it or from time to time coming
into its possession during the time this Agreement shall
continue in effect. Custodian shall have no responsibility or
liability whatsoever for or on account of securities or monies
not so delivered.
B. Delivery of Accounts and Records
Each Fund shall turn over or cause to be turned over to
Custodian all of the Fund's relevant accounts and records
previously maintained. Custodian shall be entitled to rely
conclusively on the completeness and correctness of the
accounts and records turned over to it, and each Fund shall
indemnify and hold Custodian harmless of and from any and all
expenses, damages and losses whatsoever arising out of or in
connection with any error, omission, inaccuracy or other
deficiency of such Fund's accounts and records or in the
failure of such Fund to provide, or to provide in a timely
manner, any accounts, records or information needed by the
Custodian to perform its functions hereunder.
C. Delivery of Assets to Third Parties
Custodian will receive delivery of and keep safely the assets
of each Fund delivered to it from time to time segregated in a
separate account, and if any Fund is comprised of more than
one portfolio of investment securities (each a "Portfolio")
Custodian shall keep the

<PAGE>

assets of each Portfolio segregated in a separate account.
Custodian will not deliver, assign, pledge or hypothecate any
such assets to any person except as permitted by the
provisions of this Agreement or any agreement executed by it
according to the terms of Section 3.S. of this Agreement. Upon
delivery of any such assets to a subcustodian pursuant to
Section 3.S. of this Agreement, Custodian will create and
maintain records identifying those assets which have been
delivered to the subcustodian as belonging to the applicable
Fund, by Portfolio if applicable. The Custodian is responsible
for the safekeeping of the securities and monies of the Funds
only until they have been transmitted to and received by other
persons as permitted under the terms of this Agreement, except
for securities and monies transmitted to subcustodians
appointed under Section 3.S. of this Agreement, for which
Custodian remains responsible to the extent provided in
Section 3.S. hereof. Custodian may participate directly or
indirectly through a subcustodian in the Depository Trust
Company (DTC), Treasury/Federal Reserve Book Entry System (Fed
System), Participant Trust Company (PTC) or other depository
approved by the Funds (as such entities are defined at 17 CFR
Section 270.17f-4(b)) (each a "Depository" and collectively,
the "Depositories").

<PAGE>

D. Registration of Securities
The Custodian shall at all times hold registered securities of
the Funds in the name of the Custodian, the applicable Fund,
or a nominee of either of them, unless specifically directed
by instructions to hold such registered securities in
so-called "street name," provided that, in any event, all such
securities and other assets shall be held in an account of the
Custodian containing only assets of the applicable Fund, or
only assets held by the Custodian as a fiduciary or custodian
for customers, and provided further, that the records of the
Custodian at all times shall indicate the Fund or other
customer for which such securities and other assets are held
in such account and the respective interests therein. If,
however, any Fund directs the Custodian to maintain securities
in "street name", notwithstanding anything contained herein to
the contrary, the Custodian shall be obligated only to utilize
its best efforts to timely collect income due the Fund on such
securities and to notify the Fund of relevant corporate
actions including, without limitation, pendency of calls,
maturities, tender or exchange offers. All securities, and the
ownership thereof by the applicable Fund, which are held by
Custodian hereunder, however, shall at all times be
identifiable on the records of the Custodian. Each Fund agrees
to hold Custodian and its nominee harmless for any liability
as a shareholder of record of its securities held in custody.
E. Exchange of Securities
Upon receipt of instructions as defined herein in Section 4.A,
Custodian will exchange, or cause to be exchanged, portfolio
securities held by it for the account of a Fund for other
securities or cash issued or paid in connection with any
reorganization, recapitalization, merger, consolidation,
split-up of shares, change of par value, conversion or
otherwise, and will deposit any such securities in accordance
with the terms of any reorganization or protective plan.
Without instructions, Custodian is authorized to exchange
securities held by it in temporary form for securities in
definitive form, to effect an exchange of shares when the par
value of the stock is changed, and, upon receiving payment
therefor, to surrender bonds or other securities held by it at
maturity or when advised of earlier call for redemption,
except that Custodian shall receive instructions prior to
surrendering any convertible security.
F. Purchases of Investments of a Fund - Other Than Options and
Futures

<PAGE>

Each Fund will, on each business day on which a purchase of
securities (other than options and futures) shall be made by
it, deliver to Custodian instructions which shall specify with
respect to each such purchase: 1. If applicable, the name of
the Portfolio making such purchase; 2. The name of the issuer
and description of the security; 3. The number of shares and
the principal amount purchased, and
accrued interest, if any;
4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage commission,
taxes and other expenses payable in connection with the
purchase;
7. The total amount payable upon such purchase;
8. The name of the person from whom or the broker or dealer
through whom the purchase was made; and
9. Whether the security is to be received in certificated form
or via a specified Depository.
In accordance with such instructions, Custodian will pay for
out of monies held for the account of the applicable Fund, but
only insofar as such monies are available for such purpose,
and receive the portfolio securities so purchased by or for
the account of the applicable Fund, except that Custodian may
in its sole discretion advance funds to the Fund which may
result in an overdraft because the monies held by the
Custodian on behalf of the Fund are insufficient to pay the
total amount payable upon such purchase. Except as otherwise
instructed by the applicable Fund, such payment shall be made
by the Custodian only upon receipt of securities: (a) by the
Custodian; (b) by a clearing corporation of a national
exchange of which the Custodian is a member; or (c) by a
Depository. Notwithstanding the foregoing, (i) in the case of
a repurchase agreement, the Custodian may release funds to a
Depository prior to the receipt of advice from the Depository
that the securities underlying such repurchase agreement have
been transferred by book-entry into the account maintained
with such Depository by the Custodian, on behalf of its
customers, provided that the Custodian's instructions to the
Depository require that the Depository make payment of such
funds only upon transfer by book-entry of the securities
underlying the repurchase agreement in such account; (ii)

<PAGE>

in the case of time deposits, call account deposits, currency
deposits and other deposits, foreign exchange transactions,
futures contracts or options, the Custodian may make payment
therefor before receipt of an advice or confirmation
evidencing said deposit or entry into such transaction; and
(iii) in the case of the purchase of securities, the
settlement of which occurs outside of the United States of
America, the Custodian may make, or cause a subcustodian
appointed pursuant to Section 3.S.2. of this Agreement to
make, payment therefor in accordance with generally accepted
local custom and market practice.
G. Sales and Deliveries of Investments of a Fund - Other Than
Options and Futures Each Fund will, on each business day on
which a sale of investment securities (other than options and
futures) of such Fund has been made, deliver to Custodian
instructions specifying with respect to each such sale:
1. If applicable, the name of the Portfolio making such sale;
2. The name of the issuer and description of the securities;
3. The number of shares and principal amount sold, and accrued
interest, if any;
4. The date on which the securities sold were purchased or
other information identifying the securities sold and to be
delivered;
5. The trade date;
6. The settlement date;
7. The sale price per unit and the brokerage commission, taxes
or other expenses payable in connection with such sale;
8. The total amount to be received by Fund upon such sale; and
9. The name and address of the broker or dealer through whom
or person to whom the sale was made.
In accordance with such instructions, Custodian will deliver
or cause to be delivered the securities thus designated as
sold for the account of the applicable Fund to the broker or
other person specified in the instructions relating to such
sale. Except as otherwise instructed by the applicable Fund,
such delivery shall be made upon receipt of: (a) payment
therefor in such form as is satisfactory to the Custodian; (b)
credit to the account of the Custodian with a clearing
corporation of a national securities exchange of which the
Custodian is a member; or (c) credit to the

<PAGE>

account of the Custodian, on behalf of its customers, with a
Depository. Notwithstanding the foregoing: (i) in the case of
securities held in physical form, such securities shall be
delivered in accordance with "street delivery custom" to a
broker or its clearing agent; or (ii) in the case of the sale
of securities, the settlement of which occurs outside of the
United States of America, the Custodian may make, or cause a
subcustodian appointed pursuant to Section 3.S.2. of this
Agreement to make, such delivery upon payment therefor in
accordance with generally accepted local custom and market
practice.
H. Purchases or Sales of Options and Futures
Each Fund will, on each business day on which a purchase or
sale of the following options and/or futures shall be made by
it, deliver to Custodian instructions which shall specify with
respect to each such purchase or sale: 1. If applicable, the
name of the Portfolio making such purchase
or sale;
2. Security Options
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening,
exercising, expiring or closing transaction;
g. Whether the transaction involves a put or call; h.
Whether the option is written or purchased; i. Market
on which option traded; and j. Name and address of
the broker or dealer through whom
the sale or purchase was made.
3. Options on Indices
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
f. The expiration date;
g. Whether the transaction is an opening,
exercising, expiring or closing transaction;

<PAGE>

h. Whether the transaction involves a put or call;
i. Whether the option is written or purchased; and
j. The name and address of the broker or dealer
through whom the sale or purchase was made, or
other applicable settlement instructions.
4. Security Index Futures Contracts
a. The last trading date specified in the contract
and, when available, the closing level, thereof;
b. The index level on the date the contract is
entered into;
c. The multiple;
d. Any margin requirements;
e. The need for a segregated margin account (in
addition to instructions, and if not already
in the possession of Custodian, Fund shall
deliver a substantially complete and
executed custodial safekeeping account and
procedural agreement which shall be
incorporated by reference into this Custody
Agreement); and
f. The name and address of the futures
commission merchant through whom the sale or
purchase was made, or other applicable
settlement instructions.
5. Options on Index Future Contracts
a. The underlying index future contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening,
exercising, expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased; and
i. The market on which the option is traded.
I. Securities Pledged or Loaned
If specifically allowed for in the prospectus of the applicable
Fund, and subject to such additional terms and conditions as
Custodian may require:
1. Upon receipt of instructions, Custodian will release or
cause to be released securities held in custody to the
pledgee designated in such instructions by way of pledge
or

<PAGE>

hypothecation to secure any loan incurred by such
Fund; provided, however, that the securities shall be
released only upon payment to Custodian of the monies
borrowed, except that in cases where additional
collateral is required to secure a borrowing already
made, further securities may be released or caused to
be released for that purpose upon receipt of
instructions. Upon receipt of instructions, Custodian
will pay, but only from funds available for such
purpose, any such loan upon redelivery to it of the
securities pledged or hypothecated therefor and upon
surrender of the note or notes evidencing such loan.
2. Upon receipt of instructions, Custodian will release
securities held in custody to the borrower designated
in such instructions; provided, however, that the
securities will be released only upon deposit with
Custodian of full cash collateral as specified in
such instructions, and that such Fund will retain the
right to any dividends, interest or distribution on
such loaned securities. Upon receipt of instructions
and the loaned securities, Custodian will release
the cash collateral to the borrower.
J. Routine Matters
Custodian will, in general, attend to all routine and
mechanical matters in connection with the sale, exchange,
substitution, purchase, transfer, or other dealings with
securities or other property of the Funds except as may be
otherwise provided in this Agreement or directed from time to
time by the applicable Fund in writing.
K. Deposit Accounts
Custodian will open and maintain one or more special purpose
deposit accounts for each Fund in the name of Custodian
("Accounts"), subject only to draft or order by Custodian upon
receipt of instructions. All monies received by Custodian from
or for the account of any Fund shall be deposited in the
appropriate Accounts. Barring events not in the control of the
Custodian such as strikes, lockouts or labor disputes, riots,
war or equipment or transmission failure or damage, fire,
flood, earthquake or other natural disaster, action or
inaction of governmental authority or other causes beyond its
control, at 9:00 a.m., Kansas City time, on the second
business day after deposit of any check into an Account,

<PAGE>

Custodian agrees to make Fed Funds available to the applicable
Fund in the amount of the check. Deposits made by Federal
Reserve wire will be available to the Fund immediately and ACH
wires will be available to the Fund on the next business day.
Income earned on the portfolio securities will be credited to
the Fund based on the schedule attached as Exhibit A. The
Custodian will be entitled to reverse any credited amounts
where credits have been made and monies are not finally
collected. If monies are collected after such reversal, the
Custodian will credit the Fund in that amount. Custodian may
open and maintain Accounts in such banks or trust companies as
may be designated by it or by the applicable Fund in writing,
all such Accounts, however, to be in the name of Custodian and
subject only to its draft or order. Funds received and held
for the account of different Portfolios shall be maintained in
separate Accounts established for each Portfolio.

L. Income and Other Payments to the Funds
Custodian will:
1. Collect, claim and receive and deposit for the account of the
applicable Fund all income and other payments which become due
and payable on or after the effective date of this Agreement
with respect to the securities deposited under this Agreement,
and credit the account of such Fund in accordance with the
schedule attached hereto as Exhibit A. If, for any reason,
the Fund is credited with income that is not subsequently
collected, Custodian may reverse that credited amount.
2. Execute ownership and other certificates and
affidavits for all federal, state and local tax
purposes in connection with the collection of bond
and note coupons; and
3. Take such other action as may be necessary or proper
in connection with:
a. the collection, receipt and
deposit of such income and
other payments, including but not limited to the
presentation for payment of:
1. all coupons and other income items requiring
presentation; and
2. all other securities which may mature or be
called, redeemed, retired or otherwise become
payable and regarding which the Custodian has

<PAGE>

actual knowledge, or should reasonably be
expected to have knowledge; and
b. the endorsement for collection, in the name of
the applicable Fund, of all checks, drafts or
other negotiable instruments.
Custodian, however, will not be required to institute suit or
take other extraordinary action to enforce collection except
upon receipt of instructions and upon being indemnified to its
satisfaction against the costs and expenses of such suit or
other actions. Custodian will receive, claim and collect all
stock dividends, rights and other similar items and will deal
with the same pursuant to instructions.
M. Payment of Dividends and Other Distributions
On the declaration of any dividend or other distribution on the
shares of capital stock of any Fund("Fund Shares") by the Board of
Directors of such Fund, such Fund shall deliver to Custodian
instructions with respect thereto. On the date specified in such
instructions for the payment of such dividend or other distribution
,Custodian will pay out of the monies held for the account of such
Fund, insofar as the same shall be available for such purposes, and
credit to the account of the Dividend Disbursing Agent for such
Fund, such amount as may be specified in such instructions.
N. Shares of a Fund Purchased by Such Fund
Whenever any Fund Shares are repurchased or redeemed by a
Fund, such Fund or its agent shall advise Custodian of the
aggregate dollar amount to be paid for such shares and shall
confirm such advice in writing. Upon receipt of such advice,
Custodian shall charge such aggregate dollar amount to the
account of such Fund and either deposit the same in the
account maintained for the purpose of paying for the
repurchase or redemption of Fund Shares or deliver the same in
accordance with such advice. Custodian shall not have any duty
or responsibility to determine that Fund Shares have been
removed from the proper shareholder account or accounts or
that the proper number of Fund Shares have been cancelled and
removed from the shareholder records.
O. Shares of a Fund Purchased from Such Fund
Whenever Fund Shares are purchased from any Fund, such Fund
will deposit or cause to be deposited with Custodian the
amount received for such shares. Custodian shall not have any
duty or

<PAGE>

responsibility to determine that Fund Shares purchased from
any Fund have been added to the proper shareholder account or
accounts or that the proper number of such shares have been
added to the shareholder records.
P. Proxies and Notices
Custodian will promptly deliver or mail or have delivered or
mailed to the applicable Fund all proxies properly signed, all
notices of meetings, all proxy statements and other notices,
requests or announcements affecting or relating to securities
held by Custodian for such Fund and will, upon receipt of
instructions, execute and deliver or cause its nominee to
execute and deliver or mail or have delivered or mailed such
proxies or other authorizations as may be required. Except as
provided by this Agreement or pursuant to instructions
hereafter received by Custodian, neither it nor its nominee
will exercise any power inherent in any such securities,
including any power to vote the same, or execute any proxy,
power of attorney, or other similar instrument voting any of
such securities, or give any consent, approval or waiver with
respect thereto, or take any other similar action.
Q. Disbursements
Custodian will pay or cause to be paid, insofar as funds are
available for the purpose, bills, statements and other
obligations of each Fund (including but not limited to
obligations in connection with the conversion, exchange or
surrender of securities owned by such Fund, interest charges,
dividend disbursements, taxes, management fees, custodian
fees, legal fees, auditors' fees, transfer agents' fees,
brokerage commissions, compensation to personnel, and other
operating expenses of such Fund) pursuant to instructions of
such Fund setting forth the name of the person to whom payment
is to be made, the amount of the payment, and the purpose of
the payment.
R. Daily Statement of Accounts
Custodian will, within a reasonable time, render to each Fund
a detailed statement of the amounts received or paid and of
securities received or delivered for the account of the Fund
during each business day. Custodian will, from time to time,
upon request by any Fund, render a detailed statement of the
securities and monies held for such Fund under this Agreement,
and Custodian will maintain such books and records as are
necessary to enable it to do so.

<PAGE>

Custodian will permit such persons as are authorized by any
Fund, including such Fund's independent public accountants,
reasonable access to such records or will provide reasonable
confirmation of the contents of such records, and if demanded,
Custodian will permit federal and state regulatory agencies to
examine the securities, books and records. Upon the written
instructions of any Fund or as demanded by federal or state
regulatory agencies, Custodian will instruct any subcustodian
to permit such persons as are authorized by such Fund,
including such Fund's independent public accountants,
reasonable access to such records or to provide reasonable
confirmation of the contents of such records, and to permit
such agencies to examine the books, records and securities
held by such subcustodian which relate to such Fund.
S. Appointment of Subcustodians

1. Notwithstanding any other provisions of this Agreement, all or
any of the monies or securities of the Funds may be held in
Custodian's own custody or in the custody of one or more other
banks or trust companies acting as subcustodians as may be
selected by Custodian. Any such subcustodian selected by the
Custodian must have the qualifications required for a
custodian under the 1940 Act, as amended. Custodian shall be
responsible to the applicable Fund for any loss, damage or
expense suffered or incurred by the Fund resulting from the
actions or omissions of any subcustodians selected and
appointed by Custodian (except subcustodians appointed at the
request of the Fund and as provided in Subsection 2 below) to
the same extent Custodian would be responsible to the Fund
under Section 5. of this Agreement if it committed the act or
omission itself. Upon request of any Fund, Custodian shall be
willing to contract with other subcustodians reasonably
acceptable to the Custodian for purposes of (i) effecting
third-party repurchase transactions with banks, brokers,
dealers, or other entities through the use of a common
custodian or subcustodian, or (ii) providing depository and
clearing agency services with respect to certain variable rate
demand note securities, or (iii) for other reasonable purposes
specified by such Fund; provided, however, that the Custodian
shall be responsible to the Fund for any loss, damage or
expense suffered or incurred by the Fund resulting from the

<PAGE>

actions or omissions of any such subcustodian only to
the same extent such subcustodian is responsible to
the Custodian. The Fund shall be entitled to review
the Custodian's contracts with any such subcustodians
appointed at its request. Custodian shall be
responsible to the applicable Fund for any loss,
damage or expense suffered or incurred by the Fund
resulting from the actions or omissions of any
Depository only to the same extent such Depository is
responsible to Custodian.

2. Notwithstanding any other provisions of this Agreement, each
Fund's foreign securities (as defined in Rule 17f-5(c)(1)
under the 1940 Act) and each Fund's cash or cash equivalents,
in amounts deemed by the Fund to be reasonably necessary to
effect Fund's foreign securities transactions, may be held in
the custody of one or more banks or trust companies acting as
subcustodians, and thereafter, pursuant to a written contract
or contracts as approved by such Fund's Board of Directors,
may be transferred to accounts maintained by any such
subcustodian with eligible foreign custodians, as defined in
Rule 17f-5(c)(2). Custodian shall be responsible to the Fund
for any loss, damage or expense suffered or incurred by the
Fund resulting from the actions or omissions of any foreign
subcustodian only to the same extent the foreign subcustodian
is liable to the domestic subcustodian with which the
Custodian contracts for foreign subcustody purposes.
T. Accounts and Records
Custodian will prepare and maintain, with the direction and as
interpreted by each Fund, its accountants and/or other
advisors, in complete, accurate and current form all accounts
and records (i) required to be maintained by such Fund with
respect to portfolio transactions under Rule 31a of the 1940
Act, (ii) required to be maintained as a basis for calculation
of such Fund's net asset value, and (iii) as otherwise agreed
upon between the parties. Custodian will preserve said records
in the manner and for the periods prescribed in the 1940 Act
or for such longer period as is agreed upon by the parties.
Custodian relies upon each Fund to furnish, in writing or its
electronic or digital equivalent, accurate and timely
information needed by Custodian to complete such Fund's
records and perform daily calculation of such Fund's net

<PAGE>

asset value. Custodian shall incur no liability and each Fund
shall indemnify and hold harmless Custodian from and against
any liability arising from any failure of such Fund to furnish
such information in a timely and accurate manner, even if such
Fund subsequently provides accurate but untimely information.
It shall be the responsibility of each Fund to furnish
Custodian with the declaration, record and payment dates and
amounts of any dividends or income and any other special
actions required concerning each of its securities when such
information is not readily available from generally accepted
securities industry services or publications.
U. Accounts and Records Property of the Funds
Custodian acknowledges that all of the accounts and records
maintained by Custodian pursuant to this Agreement are the
property of the applicable Fund, and will be made available to
such Fund for inspection or reproduction within a reasonable
period of time, upon demand. Custodian will assist any Fund's
independent auditors, or upon approval of the Fund, or upon
demand, any regulatory body, in any requested review of the
Fund's accounts and records but shall be reimbursed by the
Fund for all expenses and employee time invested in any such
review outside of routine and normal periodic reviews.
Upon receipt from any Fund of the necessary information or
instructions, Custodian will supply information from the books
and records it maintains for such Fund that the Fund needs for
tax returns, questionnaires, periodic reports to shareholders
and such other reports and information requests as such Fund
and Custodian shall agree upon from time to time.
V. Adoption of Procedures
Custodian and each Fund may from time to time adopt procedures
as they agree upon, and Custodian may conclusively assume that
no procedure approved or directed by a Fund or its accountants
or other advisors conflicts with or violates any requirements
of its prospectus, articles of incorporation, bylaws, any
applicable law, rule or regulation, or any order, decree or
agreement by which such Fund may be bound. Each Fund will be
responsible to notify Custodian of any changes in statutes,
regulations, rules, requirements or policies which might
necessitate changes in Custodian's responsibilities or
procedures.
W. Calculation of Net Asset Value

<PAGE>

Custodian will calculate each Fund's net asset value, in
accordance with such Fund's prospectus. Custodian will price
the securities and foreign currency holdings of each Fund for
which market quotations are available by the use of outside
services designated by such Fund which are normally used and
contracted with for this purpose; all other securities and
foreign currency holdings will be priced in accordance with
such Fund's instructions. Custodian will have no
responsibility for the accuracy of the prices quoted by these
outside services or for the information supplied by any Fund
or for acting upon such instructions.

<PAGE>

X. Advances
In the event Custodian or any subcustodian shall, in its sole
discretion, advance cash or securities for any purpose
(including but not limited to securities settlements, purchase
or sale of foreign exchange or foreign exchange contracts and
assumed settlement) for the benefit of any Fund or Portfolio
thereof, the advance shall be payable by the applicable Fund
or Portfolio on demand. Any such cash advance shall be subject
to an overdraft charge at the rate set forth in the
then-current fee schedule from the date advanced until the
date repaid. As security for each such advance, each Fund
hereby grants Custodian and such subcustodian a lien on and
security interest in all property at any time held for the
account of the Fund or applicable Portfolio, including without
limitation all assets acquired with the amount advanced.
Should the Fund fail to promptly repay the advance, the
Custodian and such subcustodian shall be entitled to utilize
available cash and to dispose of such Fund's or Portfolio's
assets pursuant to applicable law to the extent necessary to
obtain reimbursement of the amount advanced and any related
overdraft charges.
Y. Exercise of Rights; Tender Offers
Upon receipt of instructions, the Custodian shall: (a) deliver
warrants, puts, calls, rights or similar securities to the
issuer or trustee thereof, or to the agent of such issuer or
trustee, for the purpose of exercise or sale, provided that
the new securities, cash or other assets, if any, are to be
delivered to the Custodian; and (b) deposit securities upon
invitations for tenders thereof, provided that the
consideration for such securities is to be paid or delivered
to the Custodian or the tendered securities are to be returned
to the Custodian.
4. INSTRUCTIONS.
A. The term "instructions", as used herein, means written (including
telecopied or telexed) or oral instructions which Custodian
reasonably believes were given by a designated representative of any
Fund. Each Fund shall deliver to Custodian, prior to delivery of
any assets to Custodian and thereafter from time to time as changes
therein are necessary, written instructions naming one or more
designated representatives to give instructions in the name and on
behalf of such Fund, which instructions may be received and accepted
by Custodian as conclusive evidence of the authority of any

<PAGE>

designated representative to act for such Fund and may be
considered to be in full force and effect (and Custodian will
be fully protected in acting in reliance thereon) until
receipt by Custodian of notice to the contrary. Unless such
written instructions delegating authority to any person to
give instructions specifically limit such authority to
specific matters or require that the approval of anyone else
will first have been obtained, Custodian will be under no
obligation to inquire into the right of such person, acting
alone, to give any instructions whatsoever which Custodian may
receive from such person. If any Fund fails to provide
Custodian any such instructions naming designated
representatives, any instructions received by Custodian from a
person reasonably believed to be an appropriate representative
of such Fund shall constitute valid and proper instructions
hereunder. "Designated representatives" of a Fund may include
its employees and agents, including investment managers and
their employees.
B. No later than the next business day immediately following each
oral instruction, the applicable Fund will send Custodian
written confirmation of such oral instruction. At Custodian's
sole discretion, Custodian may record on tape, or otherwise,
any oral instruction whether given in person or via telephone,
each such recording identifying the date and the time of the
beginning and ending of such oral instruction.
C. If Custodian shall provide any Fund any direct access to any
computerized recordkeeping and reporting system used hereunder or if
Custodian and any Fund shall agree to utilize any electronic system
of communication, such Fund shall be fully responsible for any and
all consequences of the use or misuse of the terminal device,
passwords, access instructions and other means of access to such
system(s) which are utilized by, assigned to or otherwise made
available to the Fund. Each Fund agrees to implement and enforce
appropriate security policies and procedures to prevent unauthorized
or improper access to or use of such system(s). Custodian shall be
fully protected in acting hereunder upon any instructions,
communications, data or other information received by Custodian by
such means as fully and to the same effect as if delivered to
Custodian by written instrument signed by the requisite authorized
representative(s) of the applicable Fund. Each Fund shall indemnify
and hold Custodian harmless from and against any and all losses,

<PAGE>

damages, costs, charges, counsel fees, payments, expenses and
liability which may be suffered or incurred by Custodian as a
result of the use or misuse, whether authorized or
unauthorized, of any such system(s) by such Fund or by any
person who acquires access to such system(s) through the
terminal device, passwords, access instructions or other means
of access to such system(s) which are utilized by, assigned to
or otherwise made available to the Fund, except to the extent
attributable to any negligence or willful misconduct by
Custodian.
5. LIMITATION OF LIABILITY OF CUSTODIAN.
A. Custodian shall at all times use reasonable care and due diligence
and act in good faith in performing its duties under this Agreement.
Custodian shall not be responsible for, and the applicable Fund
shall indemnify and hold Custodian harmless from and against, any
and all losses, damages, costs, charges, counsel fees, payments,
expenses and liability which may be asserted against Custodian,
incurred by Custodian or for which Custodian may be held to be
liable, arising out of or attributable to:
1. All actions taken by Custodian pursuant to this Agreement or
any instructions provided to it hereunder, provided that
Custodian has acted in good faith and with due diligence and
reasonable care; and
2. The Fund's refusal or failure to comply with the
terms of this Agreement (including without limitation
the Fund's failure to pay or reimburse Custodian
under this indemnification provision), the Fund's
negligence or willful misconduct, or the failure of
any representation or warranty of the Fund hereunder
to be and remain true and correct in all respects at
all times.
B. Custodian may request and obtain at the expense of the applicable
Fund the advice and opinion of counsel for such Fund or of its own
counsel with respect to questions or matters of law, and it shall be
without liability to such Fund for any action taken or omitted by it
in good faith, in conformity with such advice or opinion. If
Custodian reasonably believes that it could not prudently act
according to the instructions of any Fund or the Fund's accountants
or counsel, it may in its discretion, with notice to the Fund, not
act according to such instructions.

<PAGE>

C. Custodian may rely upon the advice and statements of any Fund,
its accountants and officers or other authorized individuals,
and other persons believed by it in good faith to be expert in
matters upon which they are consulted, and Custodian shall not
be liable for any actions taken, in good faith, upon such
advice and statements.
D. If any Fund requests Custodian in any capacity to take any
action which involves the payment of money by Custodian, or
which might make it or its nominee liable for payment of
monies or in any other way, Custodian shall be indemnified and
held harmless by such Fund against any liability on account of
such action; provided, however, that nothing herein shall
obligate Custodian to take any such action except in its sole
discretion.
E. Custodian shall be protected in acting as custodian hereunder upon
any instructions, advice, notice, request, consent, certificate or
other instrument or paper appearing to it to be genuine and to have
been properly executed. Custodian shall be entitled to receive upon
request as conclusive proof of any fact or matter required to be
ascertained from any Fund hereunder a certificate signed by an
officer or designated representative of the Fund. Each Fund shall
also provide Custodian instructions with respect to any matter
concerning this Agreement requested by Custodian.
F. Custodian shall be under no duty or obligation to inquire
into, and shall not be liable for:
1. The validity of the issue of any securities purchased by or
for any Fund, the legality of the purchase of any
securities or foreign currency positions or evidence
of ownership required by any Fund to be received by
Custodian, or the propriety of the decision to
purchase or amount paid therefor;
2. The legality of the sale of any securities or foreign currency
positions by or for any Fund, or the propriety of the amount
for which the same are sold;
3. The legality of the issue or sale of any Fund Shares,
or the sufficiency of the amount to be received
therefor;
4. The legality of the repurchase or redemption of any
Fund Shares, or the propriety of the amount to be
paid therefor; or
5. The legality of the declaration of any dividend by
any Fund, or the legality of the issue of any Fund
Shares in payment of any stock dividend.

<PAGE>

G. Custodian shall not be liable for, or considered to be Custodian of,
any money represented by any check, draft, wire transfer,
clearinghouse funds, uncollected funds, or instrument for the
payment of money to be received by it on behalf of the applicable
Fund until Custodian actually receives such money; provided,
however, that it shall advise such Fund promptly if it fails to
receive any such money in the ordinary course of business and shall
cooperate with the Fund toward the end that such money shall be
received.
H. Except as provided in Section 3.S., Custodian shall not be
responsible for loss occasioned by the acts, neglects,
defaults or insolvency of any broker, bank, trust company, or
any other person with whom Custodian may deal.
I. Custodian shall not be responsible or liable for the failure or
delay in performance of its obligations under this Agreement, or
those of any entity for which it is responsible hereunder, arising
out of or caused, directly or indirectly, by circumstances beyond
the affected entity's reasonable control, including, without
limitation: any interruption, loss or malfunction of any utility,
transportation, or communication service or computer (hardware or
software) services of third parties unrelated to Custodian;
inability to obtain labor, material, equipment or transportation, or
a delay in mails; governmental or exchange action, statute,
ordinance, rulings, regulations or direction; war, strike, riot,
emergency, civil disturbance, terrorism, vandalism, explosions,
labor disputes, freezes, floods, fires, tornados, acts of God or
public enemy, revolutions, or insurrection.
J. EXCEPT FOR VIOLATIONS OF SECTION 9, IN NO EVENT AND UNDER NO
CIRCUMSTANCES SHALL EITHER PARTY TO THIS AGREEMENT BE LIABLE
TO ANYONE, INCLUDING, WITHOUT LIMITATION TO THE OTHER PARTY,
FOR CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES FOR ANY ACT OR
FAILURE TO ACT UNDER ANY PROVISION OF THIS AGREEMENT EVEN IF
ADVISED OF THIS POSSIBILITY THEREOF.
6. COMPENSATION. In consideration for its services hereunder as Custodian
and investment accounting and recordkeeping agent, each Fund will pay
to Custodian such compensation as shall be set forth in a separate fee
schedule to be agreed to by the Funds and Custodian from time to time.
A copy of the initial fee schedule is attached hereto and incorporated
herein by reference. Custodian shall also be entitled to receive, and

<PAGE>

each Fund agrees to pay to Custodian, on demand, reimbursement for
Custodian's cash disbursements and reasonable out-of-pocket costs and
expenses, including attorney's fees, incurred by Custodian in
connection with the performance of services hereunder. Custodian may
charge such compensation against monies held by it for the account of
the applicable Fund. Custodian will also be entitled to charge against
any monies held by it for the account of the applicable Fund the amount
of any loss, damage, liability, advance, overdraft or expense for which
it shall be entitled to reimbursement from such Fund, including but not
limited to fees and expenses due to Custodian for other services
provided to the Fund by Custodian. Custodian will be entitled to
reimbursement by the Fund for the losses, damages, liabilities,
advances, overdrafts and expenses of subcustodians only to the extent
that (i) Custodian would have been entitled to reimbursement hereunder
if it had incurred the same itself directly, and (ii) Custodian is
obligated to reimburse the subcustodian therefor.
7. TERM AND TERMINATION. The initial term of this Agreement shall be for a
period of one year. Thereafter, each Fund and Custodian may terminate the
same by notice in writing, delivered or mailed, postage prepaid, to the
other and received not less than ninety (90) days prior to the date upon
which such termination will take effect. Upon termination of this
Agreement, each applicable Fund will pay Custodian its fees and
compensation due hereunder and its reimbursable disbursements, costs and
expenses paid or incurred to such date and each applicable Fund shall
designate a successor custodian by notice in writing to Custodian by the
termination date. In the event no written order designating a successor
custodian has been delivered to Custodian on or before the date when such
termination becomes effective, then Custodian may, at its option, deliver
the securities, funds and properties of the Fund to a bank or trust
company at the selection of Custodian, and meeting the qualifications for
custodian set forth in the 1940 Act and having not less that Two Million
Dollars ($2,000,000) aggregate capital, surplus and undivided profits, as
shown by its last published report, or apply to a court of competent
jurisdiction for the appointment of a successor custodian or other proper
relief, or take any other lawful action under the circumstances; provided,
however, that the applicable Fund shall reimburse Custodian for its costs
and expenses, including reasonable attorney's fees, incurred in connection
therewith. Custodian will, upon termination of this Agreement and payment
of all sums due to Custodian from each applicable Fund hereunder or

<PAGE>

otherwise, deliver to the successor custodian so specified or
appointed, or as specified by the court, at Custodian's office, all
securities then held by Custodian hereunder, duly endorsed and in form
for transfer, and all funds and other properties of each applicable
Fund deposited with or held by Custodian hereunder, and Custodian will
co-operate in effecting changes in book-entries at all Depositories.
Upon delivery to a successor custodian or as specified by the court,
Custodian will have no further obligations or liabilities under this
Agreement. Thereafter such successor will be the successor custodian
under this Agreement and will be entitled to reasonable compensation
for its services. In the event that securities, funds and other
properties remain in the possession of the Custodian after the date of
termination hereof owing to failure of any Fund to appoint a successor
custodian, the Custodian shall be entitled to compensation as provided
in the then-current fee schedule hereunder for its services during such
period as the Custodian retains possession of such securities, funds
and other properties, and the provisions of this Agreement relating to
the duties and obligations of the Custodian shall remain in full force
and effect.
8. NOTICES. Notices, requests, instructions and other writings addressed to
any Fund at 11 Hanover Square, New York, NY 10005, or at such other
address as the Funds may have designated to Custodian in writing, will be
deemed to have been properly given to such Fund hereunder; and notices,
requests, instructions and other writings addressed to Custodian at its
offices at 127 West 10th Street, Kansas City, Missouri 64105, Attention:
Custody Department, or to such other address as it may have designated to
the Funds in writing, will be deemed to have been properly given to
Custodian hereunder.
9. CONFIDENTIALITY.
A. Each Fund shall preserve the confidentiality of the computerized
investment portfolio and custody recordkeeping and accounting
systems used by Custodian (the "Systems") and the tapes, books,
reference manuals, instructions, records, programs, documentation
and information of, and other materials relevant to, the Systems and
the business of Custodian ("Confidential Information"). Each Fund
agrees that it will not voluntarily disclose any such Confidential
Information to any other person other than its own employees who
reasonably have a need to know such information pursuant to this
Agreement. Each Fund shall return all such Confidential Information
to Custodian upon termination or expiration of this Agreement.

<PAGE>

B. Each Fund has been informed that the Systems are licensed for use by
Custodian from third parties ("Licensors"), and each Fund
acknowledges that Custodian and the Licensors have proprietary
rights in and to the Systems and all other Custodian or Licensor
programs, code, techniques, know-how, data bases, supporting
documentation, data formats, and procedures, including without
limitation any changes or modifications made at the request or
expense or both of any Fund (collectively, the "Protected
Information"). Each Fund acknowledges that the Protected
Information constitutes confidential material and trade secrets of
Custodian and the Licensors. Each Fund shall preserve the
confidentiality of the Protected Information, and each Fund hereby
acknowledges that any unauthorized use, misuse, disclosure or taking
of Protected Information, residing or existing internal or external
to a computer, computer system, or computer network, or the knowing
and unauthorized accessing or causing to be accessed of any
computer, computer system, or computer network, may be subject to
civil liabilities and criminal penalties under applicable law. Each
Fund shall so inform employees and agents who have access to the
Protected Information or to any computer equipment capable of
accessing the same. The Licensors are intended to be and shall be
third party beneficiaries of the Funds' obligations and undertakings
contained in this paragraph.
10. MULTIPLE FUNDS AND PORTFOLIOS.
A. Each Fund, and as to any Fund which is comprised of more than one
Portfolio, each Portfolio, shall be regarded for all purposes
hereunder as a separate party apart from each other. Unless the
context otherwise requires, with respect to every transaction
covered by this Agreement, every reference herein to a Fund shall be
deemed to relate solely to the particular Fund, and, if applicable,
Portfolio thereof to which such transaction relates. Under no
circumstances shall the rights, obligations or remedies with respect
to a particular Fund or Portfolio constitute a right, obligation or
remedy applicable to any other. The use of this single document to
memorialize the separate agreement of each Fund is understood to be
for clerical convenience only and shall not constitute any basis for
joining the Funds for any reason.
B. Additional Funds and Portfolios may be added to this
Agreement, provided that Custodian consents to such addition.
Rates or charges

<PAGE>

for each additional Fund or Portfolio shall be as agreed upon
by Custodian and the applicable Fund in writing. Additional
Funds may be added hereto by execution of instruments amending
Exhibit A to add such Funds thereto.

11. MISCELLANEOUS.
A. This Agreement shall be construed according to, and the rights
and liabilities of the parties hereto shall be governed by,
the laws of the State of Missouri, without reference to the
choice of laws principles thereof.
B. All terms and provisions of this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the
parties hereto and their respective successors and permitted
assigns.
C. The representations and warranties, the indemnifications
extended hereunder, and the provisions of Section 9. hereof
are intended to and shall continue after and survive the
expiration, termination or cancellation of this Agreement.
D. No provisions of the Agreement may be amended or modified in
any manner except by a written agreement properly authorized
and executed by each party hereto.
E. The failure of any party to insist upon the performance of any terms
or conditions of this Agreement or to enforce any rights resulting
from any breach of any of the terms or conditions of this Agreement,
including the payment of damages, shall not be construed as a
continuing or permanent waiver of any such terms, conditions, rights
or privileges, but the same shall continue and remain in full force
and effect as if no such forbearance or waiver had occurred. No
waiver, release or discharge of any party's rights hereunder shall
be effective unless contained in a written instrument signed by the
party sought to be charged.
F. The captions in the Agreement are included for convenience of
reference only, and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect.
G. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
H. If any provision of this Agreement shall be determined to be
invalid or unenforceable, the remaining provisions of this
Agreement shall not be affected thereby, and every provision
of this Agreement shall

<PAGE>

remain in full force and effect and shall remain enforceable
to the fullest extent permitted by applicable law.
I. This Agreement may not be assigned by any Fund or Custodian
without the prior written consent of the other.
J. Neither the execution nor performance of this Agreement shall
be deemed to create a partnership or joint venture by and
between Custodian and any Fund or Funds.
K. Except as specifically provided herein, this Agreement does
not in any way affect any other agreements entered into among
the parties hereto and any actions taken or omitted by either
party hereunder shall not affect any rights or obligations of
the other party hereunder. IN WITNESS WHEREOF, the parties
have caused this Agreement to be
executed by their respective duly authorized officers.

INVESTORS FIDUCIARY TRUST COMPANY

By:

Title:

EACH REGISTERED INVESTMENT
COMPANY LISTED ON EXHIBIT A HERETO

By:

Title:

<PAGE>

EXHIBIT A

LIST OF FUNDS

Bull & Bear Funds I, Inc.:
Bull & Bear U.S. and Overseas Fund

Bull & Bear Funds II, Inc.:
Bull & Bear Dollar Reserves

Bull & Bear Global Income Fund, Inc.

Bull & Bear U.S. Government Securities Fund, Inc.

Bull & Bear Special Equities Fund, Inc.

Bull & Bear Gold Investors Ltd.

Bull & Bear Municipal Income Fund, Inc.

Midas Fund, Inc.

Rockwood Fund, Inc.

<PAGE>

EXHIBIT B

INVESTORS FIDUCIARY TRUST COMPANY
AVAILABILITY SCHEDULE BY TRANSACTION TYPE

TRANSACTION DTC PHYSICAL FED
- --------------- ------------------------- -------------------------- -----------------------------
TYPE CREDIT DATE FUNDS TYPE CREDIT DATE FUNDS TYPE CREDIT DATE FUNDS TYPE
=============== ========================= ========================== =============================
<S> <C> <C> <C> <C> <C> <C>
Calls Puts As Received C or F* As Received C or F*
Maturities As Received C or F* Mat. Date C or F* Mat. Date F
Tender Reorgs. As Received C As Received C N/A
Dividends Paydate C Paydate C N/A
Floating Rate Paydate C Paydate C N/A
Int.
Floating Rate N/A As Rate C N/A
Int. (No Rate) Received
Mtg. Backed P&I Paydate C Paydate + 1 C Paydate F
Bus. Day
Fixed Rate Int. Paydate C Paydate C Paydate F
Euroclear N/A C Paydate C
=========================== ================= ============ ========================== ==========================
</TABLE>

Legend

C = Clearinghouse Funds
F = Fed Funds
N/A = Not Applicable
* Availability based on how received.

[DESCRIPTION] Retirement Plan Custodial Services Agreement

FORM OF
RETIREMENT PLAN CUSTODIAL SERVICES AGREEMENT

THIS AGREEMENT is made and entered into as of the 26th day of June, 1997, by and
between INVESTOR SERVICE CENTER, INC., a Delaware corporation ("Company"), and
INVESTORS FIDUCIARY TRUST COMPANY, a Missouri trust company ("IFTC").

WHEREAS, Company desires to name a custodial trustee without discretionary trust
powers and/or a custodian (in either or both capacities a "Custodian") for
individual retirement accounts, simplified employee pension plans, 403(b)(7)
custodial accounts, savings incentive match plans for employees of small
employers and defined contribution retirement plans (whether or not "qualified"
under the Internal Revenue Code of 1986, as amended ("Code"), and whether or not
subject to the Employee Retirement Income Security Act of 1974 ("ERISA")) (all
such accounts and plans are herein referred to collectively as "Plans") which
Company sponsors, or may hereafter sponsor, for participants to invest solely in
shares of the registered investment companies for which Company provides
distribution and shareholder services (the "Funds"); and

WHEREAS, IFTC is willing to serve as Custodian with respect to Plans approved by
IFTC, but only on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties agree as follows:

1. IFTC shall serve as Custodian for Plans sponsored by the Company which IFTC
approves as hereinafter provided. Company and IFTC agree to evidence their
agreement for IFTC to act as such with respect to each Plan approved by IFTC by
executing a Retirement Plan Custodial Services Confirmation substantially in the
form attached hereto as Exhibit A ("Confirmation"), and each party agrees to
execute such further documents evidencing such agreement as may be reasonably
requested by either party from time to time. As to each Plan, the "Effective
Date" for purposes hereof shall be the date specified as such in the
Confirmation for such Plan. IFTC certifies that it is qualified to act as
Custodian for the Plans under the requirements of the Code.

2. No Plan shall provide for IFTC to serve as Custodian for any assets
whatsoever other than shares of the Funds. In no event shall any Plan provide
for IFTC (i) to have or exercise any discretionary authority or discretionary
control whatsoever respecting management of the Plan or any authority or control
respecting management or disposition of any assets of the Plan; (ii) to render
or have authority or responsibility to render investment advice with respect to
any moneys or other property of any Plan; or (iii) to have or exercise any
discretionary authority or discretionary responsibility in the administration of
any Plan. No Plan shall provide for IFTC to be, and in no event shall IFTC be
deemed to be, a "fiduciary" as defined in ERISA.

3. IFTC shall serve as Custodian with respect to shares of each Fund only during
such period of time as such Fund maintains its shareholder accounts and records
on the computerized mutual fund recordkeeping system of DST Systems, Inc. (the
"System"). IFTC shall at all times have full access to and use of all accounts
and records relating to accounts on which IFTC is named custodian or trustee and
which are maintained on the System for purposes of performing its duties and
obligations as such custodian or trustee. In addition, IFTC, its auditors and
accountants, and to the extent required by law its regulatory authorities, shall
have full access at all times to all such accounts and records for purposes of
audit, examination, and testing and verifying compliance with the terms of the
Plans and any other applicable governing documents, all applicable requirements
of law and all applicable accounting

<PAGE>

standards. Company hereby irrevocably authorizes and instructs DST Systems, Inc.
to provide such access to IFTC and to permit IFTC to make use of such accounts
and records upon demand. The Company irrevocably acknowledges and agrees that
IFTC may appoint agents and subcontractors with respect to servicing such
accounts. The provisions of this paragraph shall continue after the termination
of System and other services provided by DST Systems, Inc. to the Funds for so
long as such access to and use of such accounts and records may be reasonably
required by IFTC. Further, Company shall deliver to IFTC a Consent and
Authorization from each Fund substantially in the form attached hereto as
Exhibit B. IFTC's agreement to serve as Custodian hereunder shall not be
effective as to any Fund until IFTC has received such Consent and Authorization
executed by such Fund.

4. Company shall submit to IFTC for approval all Plans for which Company wishes
for IFTC to serve as Custodian, including any and all related application forms,
adoption agreements, transfer request forms, disclosure statements, Plan
loan-related documents, beneficiary designation forms and any other Plan-related
documents ("Plan Documents"), and any and all amendments, modifications and
supplements thereto which Company may propose to use from time to time. IFTC
shall not become the Custodian of any Plan unless and until it has approved the
applicable Plan Documents in writing as evidenced by its execution of the
Confirmation referencing the same, and IFTC shall not be deemed to have accepted
and agreed to any subsequent amendment, modification or supplement to any Plan
Document unless and until it has approved the same in writing. IFTC's review and
approval of all Plan Documents and any and all amendments, modifications and
supplements thereto is solely for IFTC's benefit, and Company shall bear full
responsibility for the form and content thereof and compliance with all
applicable laws, rules and regulations, as amended from time to time. Company
shall be responsible for acquiring, at Company's sole expense, Internal Revenue
Service determination letters ("IRS Letters") with respect to all Plans for
which such determination letters are required by the Code and shall promptly
provide IFTC copies thereof.

5. Company shall be solely responsible for all costs and expenses (i) of
preparing, printing and distributing all Plan Documents and amendments,
modifications and supplements thereto, including but not limited to costs and
expenses necessary in order to comply with new or amended laws, rules and
regulations, or (ii) related to or arising from any merger, reorganization,
dissolution, termination or other organizational change involving any Plan, any
Fund or Company.

6. With respect to all existing and future Plans (if any) in existence with
enrolled participants prior to the Effective Date with respect thereto
(including but not limited to Plans associated with any investment companies
hereafter acquired):

i. Company, at its sole expense, shall in a timely manner obtain the removal or
resignation of any prior trustee or custodian, modify and amend Plan Documents
as necessary to name IFTC as Custodian and give all notices, obtain all
approvals and take such other steps as may be required in connection therewith
under the Plan Documents and applicable laws, rules and regulations.

ii. Except as provided in the next paragraph, Company, at its sole expense,
shall cause to be prepared, mailed, distributed and filed all tax reports,
information returns and other documents required by the Code with respect to
Plan accounts ("Returns"), and shall cause to be withheld and paid all taxes
relating to such accounts, with respect to the portion of the calendar year
during which the Effective Date occurs which is prior thereto.

<PAGE>

iii. Provided that IFTC consents to do so in writing, IFTC shall cause to be
prepared, mailed, distributed and filed all Returns for the calendar year in
which the Effective Date occurs; provided, however, that Company shall provide
or cause to be provided to IFTC all necessary information with respect to the
portion of such year prior to the Effective Date. IFTC shall be entitled to rely
on the accuracy and completeness of such information with no duty to investigate
or verify the same, and Company shall indemnify and hold harmless IFTC from and
against, any and all losses, liabilities, claims, demands, actions, suits and
expenses (including reasonable attorneys fees and penalties and other sums
assessed by any federal, state or local governmental agency including the
Internal Revenue Service and the United States Department of Labor ("Government
Authority")) arising out of or resulting from any error, omission, inaccuracy or
other deficiency therein. Company, at its sole expense, shall cause to be
withheld and paid all taxes relating to such accounts with respect to the
portion of the calendar year during which the Effective Date occurs which is
prior thereto.

iv. If and to the extent necessary to permit performance of all duties and
obligations of the Custodian, Company, at its sole expense, shall transfer or
cause to be transferred onto the System to the maximum extent possible, and
shall otherwise deliver or cause to be delivered to the transfer agent or other
agent(s) which will perform shareholder account recordkeeping and servicing
functions with respect to Plan accounts after the Effective Date, all relevant
records previously maintained with respect to the accounts of participants in
such Plans.

v. IFTC shall have no responsibility for, and Company shall, except to the
extent (if any) prohibited by ERISA, indemnify and hold harmless IFTC from and
against, any and all losses, liabilities, claims, demands, actions, suits and
expenses (including reasonable attorneys fees and penalties and other sums
assessed by any Government Authority) arising out of or resulting from (a) any
acts, omissions or errors of any previous trustee or custodian, including but
not limited to its failure to file or mail any Returns, withhold or pay any
taxes, or file any schedules or other required information, (b) any error,
omission, inaccuracy or other deficiency in the Plan participant account records
or other relevant records created and maintained prior to the Effective Date, or
(c) costs and expenses of enforcing Company's obligations and agreements
hereunder.

7. As compensation for its services as Custodian as provided for in this
Agreement, the Company agrees that IFTC shall be paid the fees set forth in
Exhibit C attached hereto, as the same may be amended from time to time by
mutual agreement of the parties.

8. Subject to any longer notice periods required by the Plan Documents, Company
may remove IFTC, and IFTC may resign, as Custodian of any or all the Plans by
providing sixty (60) days written notice to the other party. In the event of
such removal or resignation, Company, at its sole expense, shall in a timely
manner appoint a successor trustee or custodian, modify and amend Plan Documents
as necessary to delete all references to IFTC, and give all notices, obtain all
approvals and take such other steps as may be required in connection therewith
under the Plan Documents and applicable laws, rules and regulations.

9. Except to the extent (if any) prohibited by ERISA, and except to the extent
resulting from the negligence or willful misconduct of IFTC, Company shall
indemnify and hold harmless IFTC from and against any and all losses,
liabilities, claims, demands, actions, suits and expenses whatsoever (including
reasonable attorneys fees, penalties and other sums assessed by any Government
Authority, and all costs and expenses of enforcing Company's

<PAGE>

obligations and agreements hereunder) arising out of, resulting from or in
connection with (i) the Plans and Plan Documents, (ii) the appointment of and
service by IFTC as Custodian therefor, (iii) any acts, omissions or errors of
any successor trustee or custodian (including but not limited to its failure to
file or mail any Returns, reports, schedules or other required documentation, or
withhold or pay any taxes) or of any Plan administrator, co-trustee or other
fiduciary, (iv) any instructions given by or on behalf of the Fund, or any
policies, procedures or practices adopted or followed by any Fund, the Company
or the Funds' transfer or other shareholder servicing agent(s) (other than
IFTC), with respect to shareholder account recordkeeping and servicing which
impacts Plan accounts, or (v) the failure of Company to perform any of its
obligations hereunder.

10. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the State of
Missouri, without reference to the conflicts of laws principles thereof.

11. All terms and provisions of this Agreement shall be binding upon, inure to
the benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns. This Agreement may not be assigned by either
party without the prior written consent of the other.

12. The provisions for indemnification extended hereunder are intended to and
shall continue after and survive the expiration, termination or cancellation of
this Agreement. All rights and remedies of each party hereunder shall be
cumulative of all other rights and remedies which may be available to such
party.

13. No provisions of the Agreement may be amended or modified in any manner
except by a written agreement properly authorized and executed by each party
hereto.

14. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.

15. If any provision of this Agreement shall be determined to be invalid or
unenforceable, the remaining provisions of this Agreement shall not be affected
thereby, and every provision of this Agreement shall remain in full force and
effect and shall remain enforceable to the fullest extent permitted by
applicable law.

16. Neither the execution nor performance of this Agreement shall be deemed to
create a partnership or joint venture by and between Company and IFTC.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the day and year first above written by their respective duly authorized
officers.

INVESTORS FIDUCIARY TRUST COMPANY
By:
Name:
Title:

INVESTOR SERVICE CENTER, INC.
By:
Name:
Title:

<PAGE>

EXHIBIT A

RETIREMENT PLAN CUSTODIAL SERVICES CONFIRMATION

This confirms that INVESTOR SERVICE CENTER, INC. ("Company") has designated, and
hereby designates, INVESTORS FIDUCIARY TRUST COMPANY, a Missouri trust company
with offices at 127 West Tenth Street, Kansas City, Missouri 64105 ("IFTC"), as
custodial trustee without discretionary trust powers and custodian under the
individual retirement account/simplified employee pension/403(b)(7) custodial
account/savings incentive match plans for employees of small employers/defined
contribution retirement plan(s) ("Plans") sponsored by Company, which are
created and governed by Plan documents as presently in effect and as may be
amended from time to time:

Investor Service Center, Inc. IRA Information Kit
Investor Service Center 403(b)(7) Account
Bull & Bear Qualified Retirement Plan (Basic Plan Document 03)
Bull & Bear Qualified Retirement Plan Supplemental Trust/Custody Agreement

IFTC has accepted, and hereby accepts, such appointment and certifies that it is
qualified to act as such custodial trustee without discretionary trust powers
and custodian under the applicable provisions of the Internal Revenue Code of
1986, as amended.

This agreement is made under and subject to the terms of that certain Retirement
Plan Custodial Services Agreement by and between Company and IFTC dated as of
June 26th, 1997 (the "Agreement"), which is hereby incorporated herein by
reference.

The Effective Date of this agreement for purposes of the Agreement shall be June
26, 1997.

IN WITNESS WHEREOF, the parties have caused this instrument to be executed by
their respective duly authorized officers.

INVESTORS FIDUCIARY TRUST COMPANY

By:
Name:
Title:

INVESTOR SERVICE CENTER, INC.

By:
Name:
Title:

<PAGE>

EXHIBIT B

CONSENT AND AUTHORIZATION

In consideration of Investors Fiduciary Trust Company ("IFTC") serving as
custodian and/or custodial trustee for the Accounts (as hereinafter defined),
the undersigned registered investment company(ies) agree(s) that IFTC shall at
all times have full access to and use of all accounts and records relating to
Accounts which are maintained on the computerized mutual fund shareholder
recordkeeping system of DST Systems, Inc. (the "System") for purposes of
performing its duties and obligations as such custodian and/or custodial
trustee. In addition, IFTC, its auditors and accountants, and to the extent
required by law its regulatory authorities, shall have full access at all times
to all such accounts and records for purposes of audit, examination, and testing
and verifying compliance with all applicable requirements of law, all applicable
accounting standards, and the terms of the retirement plan documents, trust and
custody agreements and other applicable governing documents relating to the
Accounts.

DST Systems, Inc. is hereby authorized and instructed to provide such access
to IFTC and to permit IFTC to make use of such accounts and records upon
demand. The undersigned acknowledge(s) and agree(s) that DST Systems, Inc.
may serve as agent and sub-contractor of IFTC with respect to the Accounts.

The provisions of this Consent and Authorization shall continue after the
termination of System and other services provided by DST Systems, Inc. to the
undersigned for so long as such access to and use of such accounts and records
may be reasonably required by IFTC.

The term "Accounts" shall mean all individual retirement accounts, simplified
employee pension plan accounts, 403(b)(7) custodial accounts, Keogh accounts,
defined contribution retirement plan accounts and other accounts of any type for
which IFTC may from time to time be named as custodian or trustee which contain
shares issued by the undersigned investment company(ies).

This Consent and Authorization is irrevocable in every respect, shall be binding
upon the undersigned and its (their) successors and assigns and shall inure to
the benefit of IFTC and DST Systems, Inc. and their respective successors and
assigns.

BULL & BEAR FUNDS I, INC.

By:
Name:
Title:

<PAGE>

EXHIBIT B

CONSENT AND AUTHORIZATION

BULL & BEAR FUNDS II, INC.

By:
Name:
Title:

<PAGE>

EXHIBIT B

CONSENT AND AUTHORIZATION

BULL & BEAR GLOBAL INCOME FUND, INC.

By:
Name:
Title:

<PAGE>

EXHIBIT B

CONSENT AND AUTHORIZATION

BULL & BEAR U.S. GOVERNMENT SECURITIES FUND, INC.

By:
Name:
Title:

<PAGE>

EXHIBIT B

CONSENT AND AUTHORIZATION

BULL & BEAR SPECIAL EQUITIES FUND, INC.

By:
Name:
Title:

<PAGE>

EXHIBIT B

CONSENT AND AUTHORIZATION

BULL & BEAR GOLD INVESTORS LTD.

By:
Name:
Title:

<PAGE>

EXHIBIT B

CONSENT AND AUTHORIZATION

BULL & BEAR MUNICIPAL INCOME FUND, INC.

By:
Name:
Title:

<PAGE>

EXHIBIT B

CONSENT AND AUTHORIZATION

MIDAS FUND, INC.

By:
Name:
Title:

<PAGE>

EXHIBIT B

CONSENT AND AUTHORIZATION

ROCKWOOD FUND, INC.

By:
Name:
Title:

<PAGE>

EXHIBIT C

ANNUAL FEE SCHEDULE

IRAs (including SEP-IRAs): $1.00 per IRA Plan
403(b)(7) Accounts: $1.00 per 403(b) Plan
Employer Defined Contribution Retirement Plans: $10.00 per Participant in the
Employer Plan

[DESCRIPTION] Credit Facilities Agreement

FORM OF AGREEMENT

July 1, 1997

William J. Maynard, Vice President
The Bull & Bear Funds
11 Hanover Square
New York, New York 10005

Dear Mr. Maynard:

This is to advise you that, based on the information you have furnished to us
and our discussions to date, State Street Bank and Trust Company (the "Bank")
has established a $1 million committed, unsecured line of credit (the "Committed
Line of Credit") for the funds (or to the extent a series thereof is a borrower,
such series) listed in Appendix I (collectively the "Borrowers" and each, a
"Borrower"), effective July 1, 1997 (the "Effective Date"). When the Borrower is
a series of a fund listed in Appendix I, the term Borrower shall refer only to
such series.

Our willingness to provide the proposed financing is contingent upon and subject
to the terms and conditions in this letter (the "Agreement").

The proceeds of advances made under the Committed Line of Credit (a "Loan" and
collectively, the "Loans") may be used as follows:

1. To temporarily finance the purchase or sale of securities for prompt
delivery, if the Loan is to be repaid promptly in the ordinary course of
business upon completion of the purchase or sale transaction;

2. To finance the redemption of a Borrower's shares; or

3. To enable the Borrower to meet emergency expenses not reasonably
foreseeable on the Effective Date of this Agreement, but only if the
Borrower submits a written statement executed by a duly authorized officer
of the Borrower to the effect that the advance is necessitated by a change
in circumstances involving extreme hardship, not reasonably foreseeable on
the Effective Date of this Agreement.

In any event, a Loan must be repaid in full within 60 days from the date of an
advance.

The following are attached as exhibits:

<PAGE>

amended (the "1940 Act") and the Prospectus and Statement of Additional
Information of the Borrower, and (ii) use of the Loan in accordance with
this Agreement;

2. A Promissory Note in the form attached hereto as Exhibit II;

3. An Officer's Certificate in the form attached hereto as Exhibit III;

4. An opinion of counsel to the Borrowers in a form satisfactory to the
Bank, attached hereto as Exhibit IV; and

5. An Instruction and Confirmation Certificate in the form attached hereto
as Exhibit V addressed to Investors Fiduciary Trust Company ("IFTC") in its
capacity as custodian.

At the time the Agreement is executed, the Bank shall have received an executed
Promissory Note, an executed Officer's Certificate, an opinion of counsel in a
form satisfactory to the Bank, and an executed Instruction and Confirmation
Certificate.

All Loans under the Committed Line of Credit will be evidenced by a Promissory
Note in the form attached hereto as Exhibit II. The outstanding amount of the
Loan(s) set forth on the Bank's books and records shall be conclusive evidence
of the principal amount thereof owing and unpaid to the Bank, absent manifest
error. The failure to record, or any error in so recording, any such amount on
the Bank's books and records, or any other record maintained by the Bank, shall
not limit or otherwise affect the obligation of each Borrower hereunder or under
the Promissory Note to make payments of principal of and interest on the
Promissory Note when due.

Loans under the Committed Line of Credit will be available at the Overnight
Federal Funds rate as in effect from time to time, plus 0.75% per annum.
Requests for advances or decreases under the Committed Line of Credit will be
made on the Loan Advance/Paydown Request Form, attached as Exhibit I to this
Agreement and delivered to the Bank at the time of the request. At the time each
Loan is made, the Bank shall mail to the applicable Borrower a written
confirmation of the amount of such Loan and the interest rate initially
applicable thereto. The interest rate will be calculated on a 360 days basis for
actual days elapsed.

The Bank will honor requests for Loans under the Committed Line of Credit for a
364-day period commencing on the Effective Date.

As compensation for holding available this lending commitment, each Borrower
agrees to pay its pro-rata share of a 20 basis points per annum fee (0.20%) on
the unused portion of the commitment. The commitment fee will be calculated on a
360 days basis for actual days elapsed. The fee will be payable quarterly in
arrears with the first payment commencing on October 15, 1997 (for the period
from the Effective Date through the quarter ending September 30, 1997) and every
90 days thereafter during the term of the Committed Line of Credit.

Temporary or emergency borrowings in the aggregate will be limited to an amount
not greater than 20% of the value of the applicable Borrower's total net assets
(the "Leverage Covenant"), at the time the borrowing is made, or a lesser amount
to the extent provided in the Borrower's Prospectus and Statement of Additional
Information or the 1940 Act registration statement, as the case may be. The

<PAGE>

Leverage Covenant is calculated as follows: ((total assets less total
liabilities) plus aggregate bank borrowings)/aggregate bank borrowings. If at
any time a Borrower is in violation of the Leverage Covenant, that Borrower is
required within three (3) business days to repay Loans in an amount sufficient
to achieve compliance with the Leverage Covenant.

Each Borrower hereby promises to pay the principal and interest of each Loan
made to it and related fees on the day when due to the Bank at its address
stated above. Each Borrower hereby authorizes the Bank, if and to the extent a
payment is owed by that Borrower, to charge against the Borrower's deposit
account with the Bank any amount so due on the 15th business day of the
following month.

Each Borrower agrees that it shall not borrow from any other bank, issue
preferred stock or create, incur or assume or suffer to exist any lien
(statutory or otherwise), security interest, priority, conditional sale, pledge,
charge or other encumbrance or similar rights of others or any agreement to give
any of the foregoing liens, upon or with respect to any of its properties, owned
or acquired during such period, except as a result of its investment activities
as described in its then current Prospectus and Statement of Additional
Information or Registration Statement under the 1940 Act, and indebtedness in
favor of the Borrower's custodian consisting of extensions of credit from the
custodian in the ordinary course of business to cover securities trades or liens
in favor of the Borrower's custodian granted pursuant to the custody
agreement(s) in force.

Each Borrower agrees to furnish to the Bank (1) a statement of assets and
liabilities as of the end of each semi-annual period; (2) audited annual
statements; (3) the portfolio of investments as of the end of each semi-annual
period; and (4) proxy materials, reports to the shareholders and such other
information as the Bank shall reasonably request from time to time. Such audited
annual statements and semi-annual statements shall present fairly in all
material respects the financial position of the Borrower and conform with
generally accepted accounting principles.

Each Borrower agrees that it will not change its investment objective or
fundamental investment policies, as set forth in the Borrower's most recent
Statement of Additional Information or most recent Prospectus, without the
consent of the Bank. Each Borrower agrees that it will be a default hereunder if
the investment adviser set forth opposite the Borrower's name on Appendix I
ceases to be its investment adviser, or the Borrower changes its Custodian
without the consent of the Bank, which consent will not be unreasonably
withheld.

Notwithstanding any provision to the contrary contained herein, each Loan made
to a Borrower shall be made only with respect to that Borrower and shall be
repaid solely from the assets of that Borrower, or a series of that Borrower as
the case may be, and the Bank shall have no right of recourse or offset, or any
other right whatsoever, against the assets of any other series of the Borrower
or any other Borrower with respect to such Loan or any default in respect
thereof. A default by any Borrower shall not, by itself, constitute a default by
any other Borrower hereunder.

As an inducement to the Bank to extend the Committed Line of Credit, and at any
time Loans are outstanding to a Borrower or at any time a Loan Request is made
by that Borrower, that Borrower represents and warrants to the Bank as to itself
and not as to any other Borrower that:

1. The Borrower is, or is a series of a corporation, duly organized, validly
existing and in good standing under the laws of the state of its
organization and has all corporate powers and all

<PAGE>

governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted;

2. Neither the Bank nor any affiliate of the Bank individually or in the
aggregate owns, controls or holds with the power to vote, 5% or more of the
outstanding shares of the Borrower or any affiliate of the Borrower, and
neither the Borrower nor any affiliate of the Borrower, directly or
indirectly, individually or in the aggregate, owns, controls or holds with
the power to vote, 5% or more of the outstanding voting securities of the
Bank or any affiliate of the Bank known to the Borrower;

3. Neither the Borrower nor any affiliate of the Borrower, directly or
indirectly, individually or in the aggregate, controls or, to the best
knowledge of the Borrower after due inquiry, is controlled by or under
common control of the Bank or any affiliate of the Bank known to the
Borrower. Furthermore, no officer, director, trustee or employee of the
Borrower or any affiliate of the Borrower is an affiliated person of the
Bank or of any affiliate of the Bank known to the Borrower;

4. The Borrower has no subsidiaries;

5. The Borrower is not a member of an ERISA group and has no liability in
respect of any benefit arrangement, plan or multi-employer plan subject to
ERISA;

6. The Borrower qualifies as a "regulated investment company" within the
meaning of the Internal Revenue Code, and as such, because it intends to
timely distribute all its income (including capital gains) to its
shareholders, its income will not be subject to tax at the trust level under
the Internal Revenue Code. The Borrower has filed all United States Federal
income tax returns and all other material tax returns which are required to
be filed by it and has paid all taxes due pursuant to such returns or
pursuant to any assessment received by the Borrower. The charges, accruals
and reserves on the Books of the Borrower in respect of taxes or other
governmental charges are, in the opinion of the Borrower, adequate;

7. All information heretofore furnished by the Borrower to the Bank for
purposes of or in connection with this Agreement or any transaction
contemplated hereby is, and all such information hereafter furnished by the
Borrower to the Bank will be, true and accurate in all material respects on
the date as of which such information is stated or certified. The Borrower
has disclosed to the Bank in writing any and all facts which, to the best of
the Borrower's knowledge after due inquiry, materially and adversely affect
or may affect (to the extent the Borrower can now reasonably foresee), the
business, operations or financial condition of the Borrower or the ability
of the Borrower to perform its obligations under this Agreement or the Note;

8. The execution, delivery and performance of all of the agreements and
instruments in connection with the Committed Line of Credit are within the
Borrower's power and authority and have been authorized by all necessary
proceedings and will not contravene any provision of the Borrower's
organizational documents, by laws, then-current Prospectus and Statement of
Additional Information (or 1940 Act registration statement, as the case may
be) or any agreement or undertaking binding upon the Borrower;

<PAGE>

9. There is no litigation, proceeding or investigation pending, or to the
knowledge of the Borrower, threatened against the Borrower, which would have
a material adverse effect on the Borrower's ability to carry out its
obligations hereunder or under the Note;

10. The Borrower has statutory authority to enter into this Agreement and
any loan requests hereunder will not result in an aggregate of all loans
outstanding which exceed the limits permitted under the Borrower's
then-current Prospectus and Statement of Additional Information (or 1940
Act registration statement, as the case may be), the 1940 Act, or any
applicable rule, regulation, statute or Leverage Covenant, as defined
herein;

11. The Borrower is a registered open-end management investment company
under the 1940 Act and the shares of common stock of each Borrower have
been registered under the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and applicable state
securities or so-called "Blue Sky" laws; and

12. The Borrower is in compliance in all material respects with applicable
law, including the 1940 Act and Federal Reserve Regulation U.

Upon the occurrence of any of the following events, a Borrower shall be deemed
to be in default under this Agreement:

1. Failure of a Borrower to make payment when due of any Loan; or available
cash in the deposit account is insufficient to repay any Loan due the Bank
by the Borrower;

2. Breach or failure to perform by the Borrower of any terms or conditions
as set forth in this Agreement, or any obligation of the Borrower to the
Bank;

3. If any representation, statement or warranty made or furnished in any
manner to the Bank by the Borrower in connection with this Agreement or the
Loan was false in any material respect when made or furnished;

4. A material adverse change in the business, assets, financial condition or
prospects for that particular Borrower (but no such adverse change shall be
deemed to have occurred as a result of a decline in net assets resulting
from redemptions by shareholders or investors or as a result of a decline in
the value of the securities held by the Borrower), as reasonably determined
by the Bank, has occurred;

5. A material adverse change, as reasonably determined by the Bank shall
have occurred in the facts or information disclosed to the Bank or otherwise
relied on by the Bank in considering requests hereunder;

6. If, by reason of any default by the Borrower, any obligation of the
Borrower to any other person or entity for money borrowed or on account of
any bond, note or debenture is accelerated prior to maturity;

<PAGE>

maker, surety, or guarantor of the Borrower, or entry of any final judgment
or order against them for the payment of money in excess of $500,000 shall
be rendered against the Borrower and such judgment or order shall remain
unsatisfied, undischarged, or unstayed for a period of 10 days; or

8. Upon the issuance of or notice of any tax levy, attachment, by trustee
process or otherwise, levy of execution or other process issued against the
Borrower.

Upon the occurrence of any of the events specified in the preceding section
hereof, or at any time thereafter, the Bank may, at its option, terminate this
Agreement and declare any Loans made to such Borrower under the Committed Line
of Credit to be immediately due and payable. The Bank shall thereafter have
available to it all other rights and remedies hereunder, or under any other
agreement or paper executed by the Borrower, or available to the Bank under
applicable law. Furthermore, the Borrower authorizes IFTC in its capacity as
Custodian to the Borrower, in accordance with the Instruction and Confirmation
Certificate affixed hereto as Exhibit V, to dispose of the Borrower's assets as
selected by the Borrower's investment adviser to the extent necessary to repay
all amounts due to the Bank.

Any Borrower may terminate the Committed Line of Credit by giving five (5) days
irrevocable prior written notice to the Bank and repaying in full all amounts
then outstanding to it under the Committed Line of Credit or the Note.

The Bank agrees that prior to assigning to any other lender (but not the Federal
Reserve Bank) any of its rights and obligations under the Committed Line of
Credit or the Note, or granting to any other lender any participation in any of
such rights and obligations, the Bank will obtain the Borrowers' prior written
consent, which consent shall not unreasonably be withheld.

Copies of all notices and confirmations hereunder and under the Note shall be
sent to the Bank at its address above, Attention: Edward A. Siegel, Assistant
Vice President, and to a Borrower at its address on the signature page hereto,
to the attention of the person signing on behalf of that Borrower, or to such
other address or person for notice as the parties shall have last furnished in
writing to the person giving the notice.

Any such notice or demand shall be deemed to have been duly given or made and to
have become effective (i) if delivered by hand, overnight courier or facsimile
to a responsible officer of the party to which it is directed, at the time of
receipt thereof by such officer or the sending of such facsimile and (ii) if
sent by registered or certified first-class mail, postage prepaid, on the third
business day following the mailing thereof.

This Agreement shall take effect as a sealed instrument and shall be governed by
the laws (other than the conflict of law rules) of the Commonwealth of
Massachusetts. The Agreement and the Note constitute the entire understanding
between the Borrowers and the Bank on this subject and supersede all prior
discussions. If the foregoing satisfactorily sets forth the terms and conditions
of the Committed Line of Credit, please execute and return the enclosed copy of
this Agreement together with the enclosed documents and the opinion of your
outside counsel concerning this transaction.

Sincerely,

STATE STREET BANK AND TRUST COMPANY

By: ____________________________
Name:
Title:

<PAGE>

ACCEPTED:

Bull & Bear Funds I, Inc. on behalf of:
Bull & Bear U.S. and Overseas Fund

Rockwood Fund, Inc.

By: __________________________
Name:
Title:

Address:

11 Hanover Square
New York, New York 10005

<PAGE>

APPENDIX I

BORROWER Investment Adviser
Bull & Bear Funds I, Inc. on behalf of: Bull & Bear Advisers, Inc.
Bull & Bear U.S. and Overseas Fund

Rockwood Fund, Inc. Aspen Securities and Advisory, Inc.
- ------------------------- -----------------------------------

<PAGE>

EXHIBIT I

LOAN ADVANCE/PAYDOWN
REQUEST FORM

DATE:
----------------------------------------------

TO: STATE STREET BANK AND TRUST COMPANY
----------------------------------------------

ATTN: Chuck Reid/Ned Siegel
facsimile: (617) 537-2663
----------------------------------------------

FROM: [insert borrower]
----------------------------------------------

ON BEHALF OF: [insert fund name, if a series]
----------------------------------------------

SUBJECT:

In connection with the Agreement dated July 1, 1997 with State Street Bank and
Trust Company, please increase or reduce the outstanding balance as indicated
below. The Loan should be recorded on the books of the Borrower to the Bank and
interest payable to the Bank should be recorded at the agreed upon rate.

Increase/ Cumulative Total Assets
(Decrease) Balance
Date the Loan by Outstanding

$ $ $
- --------------- ------------- ---------------- -----------

Further, the Borrower hereby represents and warrants that:

1. Proceeds from the advance shall be limited to conform with the
usage specified in the Agreement, and

2. The Borrower is in compliance with all the terms and conditions in the
Agreement.

By:
Name:
Title:
Date:
----------------------------------------------

<PAGE>

EXHIBIT II

PROMISSORY NOTE

$1,000,000 July 1, 1997
Boston, Massachusetts

For value received, each of the undersigned, (each herein called
"Borrower"), severally and not jointly hereby promise(s) to pay to the order of
State Street Bank and Trust Company (herein called "Bank") at the principal
office of Bank at 225 Franklin Street, Boston, Massachusetts 02110, or such
other place as the holder hereof shall designate

$1 MILLION DOLLARS

or, if less, the aggregate principal amount of all loans made by the Bank to the
applicable Borrower pursuant to the Agreement dated July 1, 1997 as such
agreement may be amended, extended or replaced, as evidenced on the books and
records of the Bank, together with interest on each loan at the rate or rates
per annum set forth in the Agreement.

Interest on the unpaid balance of each loan shall be payable monthly in
arrears, at the rate per annum set forth in the Agreement. Interest shall be
calculated on the basis of actual days elapsed and a 360-day year. Overdue
payments of principal (whether at stated maturity, by acceleration or otherwise)
shall bear interest, payable on demand, at a fluctuating interest rate per annum
equal to 2% (two percent), above the Prime Rate in effect from time to time.
"Prime Rate" shall mean the rate of interest announced by the Bank in Boston,
Massachusetts from time to time as its "Prime Rate".

All loans hereunder and all payments on account of principal and interest
hereof shall be recorded on the books and records of the Bank. The entries on
the books and records of the Bank (including any appearing on this Note) shall
be prima facie evidence of amounts outstanding hereunder, absent manifest error.

The obligations of each Borrower under this Note are several and not joint.
The principal amount of the Committed Line of Credit made for use by a
particular Borrower and interest thereon shall be paid or repaid solely from the
assets of such Borrower (or series thereof, if the borrowing is made on behalf
of a series of the Borrower), and the Bank shall have no right of recourse or
offset, or any other right whatsoever, against the assets of any other series of
the Borrower or any other Borrower. A default by any particular Borrower shall
not, by itself, constitute a default by any other Borrower hereunder.

Each Borrower hereby waives presentment, demand, notice, protest and all
other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement hereof and consents that this Note may be
extended from time to time and that no extension or other indulgence and no
substitution, release or surrender of collateral shall discharge or otherwise
affect the liability of the Borrower. No delay or omission on the part of the
Bank in exercising any right hereunder shall operate as a waiver of such right
or of any other right hereunder, and a waiver of any such right

<PAGE>

on any one occasion shall not be construed as a bar to or waiver of any such
right on any future occasion. "Holder" means the payee or any endorsee of this
Note who is in possession of it.

This Note shall take effect as a sealed instrument and shall be governed by
the laws (other than the conflict of law rules) of The Commonwealth of
Massachusetts.

Bull & Bear Funds I, Inc. on behalf of:
Bull & Bear U.S. and Overseas Fund

Rockwood Fund, Inc.

By:_______________________
Name:
Title:
Date:

<PAGE>

EXHIBIT III

OFFICER'S CERTIFICATE

I, _______________________ , do hereby certify that I am the duly elected
Secretary of ____________________________________________ , a Maryland
corporation (the "Corporation"), and that as such officer, I am authorized to
execute and deliver this Certificate on behalf of the Trust.
In that capacity I do hereby further certify as follows:

1. Attached hereto as Exhibit A is full, true and correct copy of the
Certificate of Incorporation of the Corporation, and said Certificate of
Incorporation remains in full force and effect on the date hereof;

2. Attached hereto as Exhibit B is a full, true and correct copy of the By-Laws
of the Corporation, and said By-Laws remain in full force and effect as of the
date hereof;

3. Attached hereto as Exhibit C are true, correct and complete copies of the
votes adopted by the Board of the Corporation on , 199_ , authorizing the
Borrower to borrow from time to time in accordance with the terms described in
this Agreement, which resolutions are in full force and effect and have not been
amended, modified, revoked or rescinded as of the date hereof;

4. Attached hereto as Exhibit D are full, true and correct copies of the current
prospectus and statement of additional information for the Corporation;

5. Attached hereto as Exhibit E and F are full, true and correct copies of the
Annual Report to --------------- Shareholders dated , 199_ , and Semi-Annual
Report to Shareholders dated , 199_ , and

6. The following are the duly elected, qualified and acting officers of the
Corporation, holding the offices set forth below their respective names, and the
signature of each such officer (where set forth hereon) is such officer's true
and genuine signature:

------------------------------

IN WITNESS WHEREOF, I have hereunto set forth my hand this ____ day of
__________, 199__

Name:___________________________

The undersigned being the _____________________ of the Corporation, DOES HEREBY
CERTIFY THAT _________________________ is duly elected, qualified and acting
Secretary of the Corporation and that the signature set forth above is his/her
true and genuine signature.

IN WITNESS WHEREOF, I have hereunto set forth my hand this _____ day of
__________, 199__.

<PAGE>

EXHIBIT IV

LEGAL OPINION OF COUNSEL

<PAGE>

EXHIBIT V

INSTRUCTION AND CONFIRMATION CERTIFICATE

BORROWER'S LETTERHEAD

July 1, 1997

TO: Investors Fiduciary Trust Company
127 West Tenth Street
Kansas City, MO 64105

RE: Bull & Bear Funds I, Inc. on behalf of:
Bull & Bear U.S. and Overseas Fund

Rockwood Fund, Inc.

Ladies and Gentlemen:

This letter serves as confirmation that the mutual funds listed in Appendix I
(each, a "Borrower") are authorized under the Committed Line of Credit to borrow
in the aggregate up to $1 million from State Street Bank and Trust Company, as
lender (the "Bank").

Pursuant to the terms contained in an Agreement dated July 1, 1997, each Loan
made to the Borrower (or series thereof, as applicable) shall be made only with
respect to a specific Borrower and shall be repaid solely from the assets of
that Borrower (or series thereof, if the Borrower is borrowing on behalf of a
particular series), and the Bank shall have no right of recourse or offset, or
any other right whatsoever, against the assets of any other Borrower with
respect to such Loan or any default in respect thereof.

Investors Fiduciary Trust Company ("IFTC"), in its capacity as custodian of the
Borrower (the "Custodian"), under the Custodian Contract (s) between the
Borrower and IFTC, dated __________________________ , 19___ , is hereby
authorized and directed by the Borrower to dispose of the Borrower's assets as
selected by the Borrower's investment adviser to the extent necessary to repay
all amounts due to the Bank to the extent that the Loans have not been paid when
due or if a default occurs as defined in the Agreement dated July 1, 1997.

The Custodian is hereby directed to act on any written instructions you receive
from the Bank with respect to the disposal of the Borrower's assets to
accomplish the foregoing. These instructions may not be amended or terminated
without the prior written consent of the Bank.

<PAGE>

IN WITNESS WHEREOF, the undersigned has duly caused these instructions to be
executed on this _____ day of ________, 19___.

Bull & Bear Funds I, Inc. on behalf of:
Bull & Bear U.S. and Overseas Fund

Rockwood Fund, Inc.

By: ___________________________
Name:
Title:

IFTC, by signing below, acknowledges receipt of, and hereby agrees to accept
instructions in accordance with the foregoing confirmation.

INVESTORS FIDUCIARY TRUST COMPANY

By: ____________________________
Name:
Title:

<PAGE>

EXECUTION COPY OF PROMISSORY NOTE

<PAGE>

PROMISSORY NOTE

$1,000,000 July 1, 1997
Boston, Massachusetts

$1 MILLION DOLLARS

The obligations of each Borrower under this Note are several and not joint.
The principal amount of the Committed Line of Credit made for use by a
particular Borrower and interest thereon shall be paid or repaid solely from the
assets of such Borrower, and the Bank shall have no right of recourse or offset,
or any other right whatsoever, against the assets of any other Borrower. A
default by any particular Borrower shall not, by itself, constitute a default by
any other Borrower hereunder.

<PAGE>

This Note shall take effect as a sealed instrument and shall be governed by
the laws (other than the conflict of law rules) of The Commonwealth of
Massachusetts.

Bull & Bear Funds I, Inc. on behalf of:
Bull & Bear U.S. and Overseas Fund

Rockwood Fund, Inc.

By : _______________________
Name:
Title:
Date:

<PAGE>

EXECUTION COPY OF OFFICER'S CERTIFICATE

<PAGE>

OFFICER'S CERTIFICATE

2. Attached hereto as Exhibit B is a full, true and correct copy of the By-Laws
of the Corporation, and said By-Laws remain in full force and effect as of the
date hereof;

4. Attached hereto as Exhibit D are full, true and correct copies of the current
prospectus and statement of additional information for the Corporation;

5. Attached hereto as Exhibit E and F are full, true and correct copies of the
Annual Report to Shareholders dated , 199_ , and Semi-Annual Report to
Shareholders dated 199_ , and

------------------------------

IN WITNESS WHEREOF, I have hereunto set forth my hand this ____ day of
__________, 199__

Name:___________________________

IN WITNESS WHEREOF, I have hereunto set forth my hand this _____ day of
__________, 199__.

<PAGE>

EXECUTION COPY OF INSTRUCTION AND CONFIRMATION CERTIFICATE

(MUST BE ON BORROWER'S LETTERHEAD)

<PAGE>

FORM OF AGREEMENT

July 1, 1997

William J. Maynard, Vice President
The Bull & Bear Funds
11 Hanover Square
New York, New York 10005

Dear Mr. Maynard:

This is to advise you that, based on the information you have furnished to us
and our discussions to date, State Street Bank and Trust Company (the "Bank")
has established a $15 million uncommitted, unsecured line of credit (the
"Uncommitted Line of Credit") for the funds (or to the extent a series thereof
is the borrower, such series) listed in Appendix I (collectively the "Borrowers"
and each, a "Borrower"), effective July 1, 1997 (the "Effective Date"). When the
Borrower is a series of a fund listed in Appendix I, the term "Borrower" shall
refer only to such series.

Our willingness to provide the proposed financing is contingent upon and subject
to the terms and conditions in this letter (the "Agreement"). This facility
carries no legal obligation on the part of the Bank to lend any amount of money
to any Borrower at any point in time, and the Borrowers will not be paying a
commitment fee for this facility.

The proceeds of advances made under the Uncommitted Line of Credit (a "Loan" and
collectively, the "Loans") may be used as follows:

2. To finance the redemption of a Borrower's shares; or

In any event, a Loan must be repaid in full within 60 days from the date of an
advance.

<PAGE>

The following are attached as exhibits:

1. A Loan request in the form attached hereto as Exhibit I (the "Loan
Advance/Paydown Request Form") stating the principal amount of the requested
Loan and warranting, at the time of borrowing, (i) compliance by such
Borrower with the Investment Company Act of 1940, as amended (the "1940
Act") and the Prospectus and Statement of Additional Information of the
Borrower, and (ii) use of the Loan in accordance with this Agreement;

2. A Promissory Note in the form attached hereto as Exhibit II;

3. An Officer's Certificate in the form attached hereto as Exhibit III;

4. An opinion of counsel to the Borrowers in a form satisfactory to the
Bank, attached hereto as Exhibit IV; and

5. An Instruction and Confirmation Certificate in the form attached hereto as
Exhibit V addressed to Investors Fiduciary Trust Company ("IFTC") in its
capacity as custodian.

All Loans made under the Uncommitted Line of Credit will be evidenced by a
Promissory Note in the form attached hereto as Exhibit II. The outstanding
amount of the Loan(s) set forth on the Bank's books and records shall be
conclusive evidence of the principal amount thereof owing and unpaid to the
Bank, absent manifest error. The failure to record, or any error in so
recording, any such amount on the Bank's books and records, or any other record
maintained by the Bank, shall not limit or otherwise affect the obligation of
each Borrower hereunder or under the Promissory Note to make payments of
principal of and interest on the Promissory Note when due.

At the time each Loan is made, a Borrower and the Bank shall agree as to the
principal amount of each Loan, the interest rate applicable to each Loan prior
to maturity, and the term thereof, provided that no Loan shall have a maturity
date more than 60 days from the date such Loan is made. Loans made under the
Uncommitted Line of Credit will be available at the Overnight Federal Funds rate
as in effect from time to time, plus a spread to be determined at the time of
borrowing. Interest on the unpaid principal amount of each Loan shall be payable
at Maturity on the same day as the principal amount of such Loan is paid or, if
the Loan is paid prior to Maturity, on the 15th business day of the following
month at the rate determined at the time of borrowing. Interest shall be
calculated on the basis of actual days elapsed for a 360-day year. Requests for
advances or decreases under the Uncommitted Line of Credit will be made on the
Loan Advance/Paydown Request Form, attached as Exhibit I to this Agreement and
delivered to the Bank at the time of the request. At the time each Loan is made,
the Bank shall mail to the applicable Borrower a written confirmation of the
amount of such Loan and the interest rate initially applicable thereto.

The Bank will honor requests for Loans under the Uncommitted Line of Credit for
a 364-day period commencing on the Effective Date.

<PAGE>

If at any time a Borrower is in violation of the Leverage Covenant, that
Borrower is required within three (3) business days to repay Loans in an amount
sufficient to achieve compliance with the Leverage Covenant.

Notwithstanding any provision to the contrary contained herein, each Loan made
to a Borrower shall be made only with respect to that Borrower and shall be
repaid solely from the assets of that Borrower, or a series of that Borrower as
the case may be, and the Bank shall have no right of recourse or offset, or any
other right whatsoever, against the assets of any other series of the
Borrower or any other Borrower with respect to such Loan or any default in
respect thereof. A default by any Borrower shall not, by itself, constitute a
default by any other Borrower hereunder. A default by a Borrower under the
Uncommitted Line of Credit shall constitute a default by that Borrower and only
that Borrower under the Leveraging Line of Credit. Similarly, a default by a

<PAGE>

Borrower under the Leveraging Line of Credit shall also constitute a default by
that Borrower and only that Borrower under the Uncommitted Line of Credit.

As an inducement to the Bank to extend the Uncommitted Line of Credit, and at
any time Loans are outstanding to a Borrower or at any time a Loan Request is
made by that Borrower, that Borrower represents and warrants to the Bank as to
itself and not as to any other Borrower that:

1. The Borrower is, or is a series of a corporation, duly organized, validly
existing and in good standing under the laws of the state of its
organization and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as
now conducted;

4. The Borrower has no subsidiaries;

5. The Borrower is not a member of an ERISA group and has no liability in
respect of any benefit arrangement, plan or multi-employer plan subject to
ERISA;

<PAGE>

8. The execution, delivery and performance of all of the agreements and
instruments in connection with the Uncommitted Line of Credit are within the
Borrower's power and authority and have been authorized by all necessary
proceedings and will not contravene any provision of the Borrower's
organizational documents, by laws, then-current Prospectus and Statement of
Additional Information (or 1940 Act registration statement, as the case may
be) or any agreement or undertaking binding upon the Borrower;

11. The Borrower is a registered management investment company under the
1940 Act and the shares of common stock of each Borrower have been
registered under the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, and applicable state securities or
so-called "Blue Sky" laws; and

12. The Borrower is in compliance in all material respects with applicable
law, including the 1940 Act and Federal Reserve Regulation U.

Upon the occurrence of any of the following events, a Borrower shall be deemed
to be in default under this Agreement:

1. Failure of a Borrower to make payment when due of any Loan; or available
cash in the deposit account is insufficient to repay any Loan due the Bank
by the Borrower;

2. Breach or failure to perform by the Borrower of any terms or conditions
as set forth in this Agreement, or any obligation of the Borrower to the
Bank;

<PAGE>

7. Upon termination of existence, insolvency, business failure, appointment
of a receiver of any part of the property of the Borrower, assignment for
the benefit of creditors by, the calling of a meeting of creditors, or the
commencement of any voluntary or involuntary proceeding under any bankruptcy
or insolvency laws by or against the Borrower or any co-maker, accommodation
maker, surety, or guarantor of the Borrower, or entry of any final judgment
or order against them for the payment of money in excess of $500,000 shall
be rendered against the Borrower and such judgment or order shall remain
unsatisfied, undischarged, or unstayed for a period of 10 days; or

8. Upon the issuance of or notice of any tax levy, attachment, by trustee
process or otherwise, levy of execution or other process issued against the
Borrower.

Upon the occurrence of any of the events specified in the preceding section
hereof, or at any time thereafter, the Bank may, at its option, terminate this
Agreement and declare any Loans made to such Borrower under the Uncommitted Line
of Credit to be immediately due and payable. The Bank shall thereafter have
available to it all other rights and remedies hereunder, or under any other
agreement or paper executed by the Borrower, or available to the Bank under
applicable law. Furthermore, the Borrower authorizes IFTC in its capacity as
Custodian to the Borrower, in accordance with the Instruction and Confirmation
Certificate affixed hereto as Exhibit V, to dispose of the Borrower's assets as
selected by the Borrower's investment adviser to the extent necessary to repay
all amounts due to the Bank.

Any Borrower may terminate the Uncommitted Line of Credit by giving five (5)
days irrevocable prior written notice to the Bank and repaying in full all
amounts then outstanding to it under the Uncommitted Line of Credit or the Note.

The Bank agrees that prior to assigning to any other lender (but not the Federal
Reserve Bank) any of its rights and obligations under the Uncommitted Line of
Credit or the Note, or granting to any other lender any participation in any of
such rights and obligations, the Bank will obtain the Borrowers' prior written
consent, which consent shall not unreasonably be withheld.

<PAGE>

This Agreement shall take effect as a sealed instrument and shall be governed by
the laws (other than the conflict of law rules) of the Commonwealth of
Massachusetts. The Agreement and the Note constitute the entire understanding
between the Borrowers and the Bank on this subject and supersede all prior
discussions. If the foregoing satisfactorily sets forth the terms and conditions
of the Uncommitted Line of Credit, please execute and return the enclosed copy
of this Agreement together with the enclosed documents and the opinion of your
outside counsel concerning this transaction.

Sincerely,

STATE STREET BANK AND TRUST COMPANY

By: ____________________________
Name:
Title:

ACCEPTED:

Bull & Bear Funds I, Inc. on behalf of:
Bull & Bear U.S. and Overseas Fund
Bull & Bear Funds II, Inc. on behalf of:
Bull & Bear Dollar Reserves
Rockwood Fund, Inc.
Midas Fund, Inc.
Bull & Bear Gold Investors Ltd.
Bull & Bear Special Equities Fund, Inc.
Bull & Bear U.S. Government Securities Fund, Inc.
Bull & Bear Municipal Income Fund, Inc.
Bull & Bear Global Income Fund, Inc.

By: __________________________
Name:
Title:

Address:

11 Hanover Square
New York, New York 10005

<PAGE>

APPENDIX I

BORROWER Investment Adviser
- -------------------------------------- ---------------------------------
Bull & Bear Funds I, Inc. on behalf of:
Bull & Bear U.S. and Overseas Fund Bull & Bear Advisers, Inc.
Bull & Bear Funds II, Inc. on behalf of:
Bull & Bear Dollar Reserves Bull & Bear Advisers, Inc.
Rockwood Fund, Inc. Aspen Securities and Advisory, Inc.
Midas Fund, Inc. Midas Management Corporation
Bull & Bear Gold Investors Ltd. Midas Management Corporation
Bull & Bear Special Equities Fund, Inc. Bull & Bear Advisers, Inc.
Bull & Bear U.S. Government Securities Fund, Inc. Bull & Bear Advisers, Inc.
Bull & Bear Municipal Income Fund, Inc. Bull & Bear Advisers, Inc.
Bull & Bear Global Income Fund, Inc. Bull & Bear Advisers, Inc.
- ---------------------------------------- -----------------------------

<PAGE>

EXHIBIT I

LOAN ADVANCE/PAYDOWN
REQUEST FORM

DATE:
---------------------------------------------

TO: STATE STREET BANK AND TRUST COMPANY
----------------------------------------------

ATTN: Chuck Reid/Ned Siegel
facsimile: (617) 537-2663
----------------------------------------------

FROM: [insert borrower]
----------------------------------------------

ON BEHALF OF: [insert fund name, if a series]
----------------------------------------------

SUBJECT:

Increase/ Cumulative Total Assets
(Decrease) Balance
Date the Loan by Outstanding

$ $ $
- ----------- ------------ ------------- --------------

Further, the Borrower hereby represents and warrants that:

1. Proceeds from the advance shall be limited to conform with the
usage specified in the Agreement, and

2. The Borrower is in compliance with all the terms and conditions in the
Agreement.

By:
Name:
Title:
Date:
---------------------------------------------------

<PAGE>

EXHIBIT II

PROMISSORY NOTE

$15,000,000 July 1, 1997
Boston, Massachusetts

$15 MILLION DOLLARS

The obligations of each Borrower under this Note are several and not joint.
The principal amount of the Uncommitted Line of Credit made for use by a
particular Borrower and interest thereon shall be paid or repaid solely from the
assets of such Borrower (or series thereof, if the borrowing is made on behalf
of a series of the Borrower), and the Bank shall have no right of recourse or
offset, or any other right whatsoever, against the assets of any other series of
the Borrower or any other Borrower. A default by any particular Borrower shall
not, by itself, constitute a default by any other Borrower hereunder.

<PAGE>

This Note shall take effect as a sealed instrument and shall be governed by
the laws (other than the conflict of law rules) of The Commonwealth of
Massachusetts.

By: _______________________
Name:
Title:
Date:

<PAGE>

EXHIBIT III

OFFICER'S CERTIFICATE

2. Attached hereto as Exhibit B is a full, true and correct copy of the By-Laws
of the Corporation, and said By-Laws remain in full force and effect as of the
date hereof;

4. Attached hereto as Exhibit D are full, true and correct copies of the current
prospectus and statement of additional information for the Corporation;

5. Attached hereto as Exhibit E and F are full, true and correct copies of the
Annual Report to Shareholders dated , 199_ , and Semi-Annual Report to
Shareholders dated , 199_ , and

------------------------------

IN WITNESS WHEREOF, I have hereunto set forth my hand this ____ day of
__________, 199__

Name:___________________________

IN WITNESS WHEREOF, I have hereunto set forth my hand this _____ day of
__________, 199__.

<PAGE>

EXHIBIT IV

LEGAL OPINION OF COUNSEL

<PAGE>

EXHIBIT V

INSTRUCTION AND CONFIRMATION CERTIFICATE

BORROWER'S LETTERHEAD

July 1, 1997

TO: Investors Fiduciary Trust Company
127 West Tenth Street
Kansas City, MO 64105

RE: 1. Bull & Bear Funds I, Inc. on behalf of:
Bull & Bear U.S. and Overseas Fund
2. Bull & Bear Funds II, Inc. on behalf of:
Bull & Bear Dollar Reserves
3. Rockwood Fund, Inc.
4. Midas Fund, Inc.
5. Bull & Bear Gold Investors Ltd.
6. Bull & Bear Special Equities Fund, Inc.
7. Bull & Bear U.S. Government Securities Fund, Inc.
8. Bull & Bear Municipal Income Fund, Inc.
9. Bull & Bear Global Income Fund, Inc.

Ladies and Gentlemen:

This letter serves as confirmation that the mutual funds listed in Appendix I
(each, a "Borrower") are authorized under the Uncommitted Line of Credit to
borrow in the aggregate up to $15 million from State Street Bank and Trust
Company, as lender (the "Bank").

Pursuant to the terms contained in the Agreement dated July 1, 1997, each Loan
made to a Borrower (or series thereof, as applicable) shall be made only with
respect to a specific Borrower and shall be repaid solely from the assets of
that Borrower (or series thereof, if the Borrower is borrowing on behalf of a
particular series), and the Bank shall have no right of recourse or offset, or
any other right whatsoever, against the assets of any other Borrower with
respect to such Loan or any default in respect thereof.

Investors Fiduciary Trust Company ("IFTC"), in its capacity as custodian of the
Borrower (the "Custodian"), under the Custodian Contract (s) between the
Borrower and IFTC, dated ______________ , 19___ , is hereby authorized and
directed by the Borrower to dispose of the Borrower's assets as selected by the
Borrower's investment advise r to the extent necessary to repay all amounts due
to the Bank to the extent that the Loans have not been paid when due or if a
default occurs as defined in the Agreement dated July 1, 1997.

<PAGE>

IN WITNESS WHEREOF, the undersigned has duly caused these instructions to be
executed on this _____ day of ________, 199__.

By: ___________________________
Name:
Title:

IFTC, by signing below, acknowledges receipt of, and hereby agrees to accept
instructions in accordance with the foregoing confirmation.

INVESTORS FIDUCIARY TRUST COMPANY

By: ____________________________
Name:
Title:

<PAGE>

EXECUTION COPY OF PROMISSORY NOTE

<PAGE>

PROMISSORY NOTE

$15,000,000 July 1, 1997
Boston, Massachusetts

$15 MILLION DOLLARS

<PAGE>

This Note shall take effect as a sealed instrument and shall be governed by
the laws (other than the conflict of law rules) of The Commonwealth of
Massachusetts.

By: _______________________
Name:
Title:
Date:

<PAGE>

EXECUTION COPY OF OFFICER'S CERTIFICATE

<PAGE>

OFFICER'S CERTIFICATE

2. Attached hereto as Exhibit B is a full, true and correct copy of the By-Laws
of the Corporation, and said By-Laws remain in full force and effect as of the
date hereof;

4. Attached hereto as Exhibit D are full, true and correct copies of the current
prospectus and statement of additional information for the Corporation;

5. Attached hereto as Exhibit E and F are full, true and correct copies of the
Annual Report to Shareholders dated , 199_ , and Semi-Annual Report to
Shareholders dated , 199_ , and

------------------------------

IN WITNESS WHEREOF, I have hereunto set forth my hand this ____ day of
__________, 199__

Name:___________________________

IN WITNESS WHEREOF, I have hereunto set forth my hand this _____ day of
__________, 199__.

<PAGE>

EXECUTION COPY OF INSTRUCTION AND CONFIRMATION CERTIFICATE

(MUST BE ON BORROWER'S LETTERHEAD)

[DESCRIPTION] Securities Lending Authorization Agreement

SECURITIES LENDING AUTHORIZATION AGREEMENT

Between

THE CLIENTS IDENTIFIED ON SCHEDULE A

and

STATE STREET BANK AND TRUST COMPANY

w:client\BULLBEA1.doc
(MUTUALSB)

<PAGE>

TABLE OF CONTENTS
PAGE
1. APPOINTMENT OF STATE STREET.................................... 1

2. SECURITIES TO BE LOANED........................................ 1

3. BORROWERS...................................................... 2

4. SECURITIES Loan AGREEMENTS..................................... 3

5. LOANS OF AVAILABLE SECURITIES.................................. 4

6. DISTRIBUTIONS ON AND VOTING RIGHTS WITH RESPECT TO
LOANED SECURITIES.............................................. 4

7. COLLATERAL..................................................... 5

8. COMPENSATION FOR THE CLIENT AND STATE STREET................... 6

9 FEE DISCLOSURE................................................. 7

10. RECORD KEEPING AND REPORTS..................................... 7

11. STANDARD OF CARE............................................... 8

12. REPRESENTATIONS AND WARRANTIES................................. 8

13. DEFINITIONS.................................................... 9

14. CONTINUING AGREEMENT; TERMINATION; REMEDIES.................... 10

15. NOTICES........................................................ 10

16. MISCELLANEOUS.................................................. 11

17. SECURITIES INVESTORS PROTECTION ACT............................ 11

18. MODIFICATION................................................... 12

<PAGE>

EXHIBITS AND SCHEDULES

EXHIBIT 3.1

EXHIBIT 3.2

SCHEDULE A

SCHEDULE B

SCHEDULE 7.1

<PAGE>

SECURITIES LENDING AUTHORIZATION AGREEMENT

Agreement dated the ____ day of ______________, 1997 THE CLIENTS IDENTIFIED ON
SCHEDULE A (each a "Client" or collectively, "Clients"), and STATE STREET BANK
AND TRUST COMPANY, a Massachusetts trust company ("State Street"), setting forth
the terms and conditions under which State Street is authorized to act on behalf
of the Client with respect to the lending of certain securities of the Client
held by State Street as trustee, agent or custodian.

Each undersigned Client, whether organized as a portfolio, series, class of
shares, or otherwise, shall be regarded for all purposes hereunder as a separate
party apart from each other. Unless the context otherwise requires, with respect
to every transaction covered by this Agreement, every reference herein shall be
deemed to relate solely to the particular client to which such transaction
relates. Under no circumstances shall the rights, obligations or remedies with
respect to a particular Client constitute a right, obligation or remedy
applicable to any other Client. The use of this single document to memorialize
the separate agreement of each Client is understood to be for administrative
convenience only and shall not constitute any basis for joining the Clients for
any reason.

Certain capitalized terms used in this Agreement are defined in Section 13.

The Client and State Street, as the parties hereto, hereby agree as follows:

1. Appointment of State Street. The Clients hereby authorize State Street as its
agent to lend Available Securities to Borrowers in accordance with the terms of
this Agreement. State Street shall have the responsibility and authority to do
or cause to be done all acts State Street shall determine to be desirable,
necessary, or appropriate to implement and administer this securities lending
program. Client agrees that State Street is acting as a fully disclosed agent
and not as principal in connection with the securities lending program. State
Street may take action as agent of the Client on an undisclosed or a disclosed
basis. State Street is also hereby authorized to request a third party bank to
undertake certain custodial functions in connection with holding of the
Collateral provided by a Borrower pursuant to the terms hereof. In connection
therewith, State Street may instruct said third party to establish and maintain
a Borrower's account and a State Street account wherein all Collateral,
including cash shall be maintained by said third party in accordance with the
terms of a form of custodial arrangement which shall also be consistent with the
terms hereof.

2. Securities to be Loaned. State Street acts or will act as agent,
trustee or custodian of certain securities owned by the Clients. All of the
Clients' securities held by State Street as agent, trustee or custodian shall be
subject to this securities lending program and constitute Available Securities
hereunder, except those securities which the Client or the Investment Manager
specifically identifies in notices to State Street as not being Available
Securities. In the absence of any such notice identifying specific securities,
State Street shall have no authority or responsibility for determining whether
any of the Client's securities should be excluded from the lending program.

3. Borrowers. The Available Securities may be loaned to any Borrower identified
on the Schedule of Borrowers, as such Schedule may be modified from time to time
by State Street and Client, including without limitation, the Capital Markets
division of State Street; provided, however, if Available Securities are loaned
to the Capital Markets division, in addition to being consistent with the terms
hereof, said Loan shall be made in accordance with

<PAGE>

the terms of the Securities Loan Agreement attached hereto as Exhibit 3.1, as
modified form time to time in accordance with the provisions hereof
(hereinafter, the "State Street Securities Loan Agreement"). The form of the
State Street Securities Loan Agreement may be modified by State Street from time
to time, without the consent of the Client, in order to comply with the
requirements of law or any regulatory authority having jurisdiction over State
Street, the Client or the securities lending program or in any other manner that
is not material and adverse to the interests of the Client.

Client acknowledges that it is aware that State Street, acting as "Lender's
Agent" hereunder and thereunder, is or may be deemed to be the same legal entity
as State Street acting as "Borrower" under the State Street Securities Loan
Agreement, notwithstanding the different designations used herein and therein or
the dual roles assumed by State Street hereunder and thereunder. Client
represents that the power granted herein to State Street, as agent, to lend U.S.
Securities owned by Client (including, in legal effect, the power granted to
State Street to make Loans to itself) and the other powers granted to State
Street, as agent herein, are given expressly for the purpose of averting and
waiving any prohibitions upon such lending or other exercise of such powers
which might exist in the absence of such powers, and that transactions effected
pursuant to and in compliance with this Agreement and the State Street
Securities Loan Agreement will not constitute a breach of trust or other
fiduciary duty by State Street.

Client further acknowledges that it has granted State Street the power to
effect securities lending transactions with the Capital Markets division of
State Street and other powers assigned to State Street hereunder and under the
Securities Loan Agreements and the State Street Securities Loan Agreement as a
result of Client's desire to increase the opportunity for it to lend securities
held in its account on fair and reasonable terms to qualified Borrowers without
such loans being considered a breach of State Street's fiduciary duty. In
connection therewith, each party hereby agrees that it shall furnish to the
other party (i) the most recent available audited statement of its financial
condition, and (ii) the most recent available unaudited statement of its
financial condition, if more recent than the audited statement. As long as any
Loan is outstanding under this Agreement, each party shall also promptly deliver
to the other party all such financial information that is subsequently
available, and any other financial information or statements that such other
party may reasonably request.

In the event any such Loan is made to the Capital Markets division, State Street
hereby covenants and agrees for the benefit of the Clients that it has adopted
and implemented procedural safeguards to help ensure that all actions taken by
it hereunder will be effected by individuals other than, and not under the
supervision of, individuals who are acting in a capacity as Borrower thereunder,
and that all trades effected hereunder will take place at the same fully
negotiated "arms length" prices offered to similarly situated third parties by
State Street when it acts as lending agent, notwithstanding the inherent
conflict of interest with respect to Loans to be effected by State Street to the
Capital Markets division.

In the event Client approves lending to borrowers resident in the United
Kingdom, Client shall complete Part 1 of the document known as a "MOD-2 form,"
which is attached hereto as Exhibit 3.2.

In the event that securities lending activity is undertaken through its London
office, State Street becomes subject to additional regulation in the UK, and
State Street is obliged to notify Client of the following matters:

i. State Street shall make available to Client established procedures in
accordance with the requirements of the Securities and Futures Authority for

<PAGE>

the effective consideration of complaints concerning State Street's activities
carried on in the UK.

ii. Where a liability in one currency is to be matched by an asset in a
different currency, or where an investment transaction relates to an investment
denominated in a currency other than sterling, a movement of exchange rates may
have a separate effect, favorable or unfavorable, on the gain or loss which
would otherwise be experienced on the investment.

iii. State Street or an affiliate may have an interest that is material to the
investment or transaction concerned and neither State Street nor any such
affiliate shall be obliged to disclose such interest or account to Client for
any profits or benefits made or derived by it or any of its associates from any
such transaction.

iv. Any assets which State Street holds in the form of money shall not be
treated by State Street as Clients' Money as defined by The Financial Services
(Client Money) Regulations 1991 of the United Kingdom as amended (the "Clients'
Money Regulations") and will not be held in accordance with the Clients' Money
Regulations or such other regulations as shall amend or replace the Clients'
Money Regulations from time to time.

4. Securities Loan Agreements. The Client authorizes State Street to enter into
one or more Securities Loan Agreements with such Borrowers as may be selected by
State Street. Each Securities Loan Agreement shall have such terms and
conditions as State Street may negotiate with the Borrower, however certain
terms of individual loans, including rebate fees to be paid to the Borrower for
the use of cash Collateral, shall be negotiated at the time a loan is made.

5. Loans of Available Securities. State Street shall have authority to
make Loans of Available Securities to Borrowers, and to deliver such securities
to Borrowers. State Street shall be responsible for determining whether any such
Loan shall be made, and for negotiating and establishing the terms of each such
Loan. State Street shall have the authority to terminate any Loan in its
discretion, at any time and without prior notice to the Client.

The Client acknowledges that State Street administers securities lending
programs for other clients of State Street. State Street will allocate
securities lending opportunities among its clients, using reasonable and
equitable methods established by State Street from time to time. State Street
does not represent or warrant that any amount or percentage of the Client's
Available Securities will in fact be loaned to Borrowers. Client agrees that it
shall have no claim against State Street and State Street shall have no
liability arising from, based on, or relating to, loans made for other clients,
or loan opportunities refused hereunder, whether or not State Street has made
fewer or more loans for any other client, and whether or not any loan for
another client, or the opportunity refused, could have resulted in loans made
under this Agreement.

The Client also acknowledges that, under the applicable Securities Loan
Agreements, Borrowers will not be required to return Loaned Securities
immediately upon receipt of notice from State Street terminating the applicable
Loan, but instead will be required to return such Loaned Securities within such
period of time following such notice as is specified in the applicable
Securities Loan Agreement. Upon receiving a notice from the Client or the
Investment Manager that Available Securities which have been loaned to a
Borrower should no longer be considered Available Securities (whether because of
the sale of such securities or otherwise), State Street shall use its reasonable
efforts to notify promptly thereafter the Borrower which has

<PAGE>

borrowed such securities that the Loan of such securities is terminated and that
such securities are to be returned within the time specified by the applicable
Securities Loan Agreement.

6. Distributions on and Voting Rights with Respect to Loaned Securities. The
Client represents and warrants that it is the beneficial owner of (or exercises
complete investment discretion over) all Available Securities free and clear of
all liens, claims, security interests and encumbrances and no such security has
been sold, and that it is entitled to receive all distributions made by the
issuer with respect to Loaned Securities. Except as provided in the next
sentence, all interest, dividends, and other distributions paid with respect to
Loaned Securities shall be credited to the Client's account on the date such
amounts are delivered by the Borrower to State Street. Any non-cash distribution
on Loaned Securities which is in the nature of a stock split or a stock dividend
shall be added to the Loan (and shall be considered to constitute Loaned
Securities) as of the date such non-cash distribution is received by the
Borrower; provided that the Client (or Investment Manager) may, by giving State
Street ten (l0) Business Days' notice prior to the date of such non-cash
distribution, direct State Street to request that the Borrower deliver such
non-cash distribution to State Street, pursuant to the applicable Securities
Loan Agreement, in which case State Street shall credit such non-cash
distribution to the Client's account on the date it is delivered to State
Street.

The Client acknowledges that it will not be entitled to participate in any
dividend reinvestment program or to vote with respect to securities that are on
loan on the applicable record date for such securities.

The Client also acknowledges that any payments of distributions from Borrower to
Client are in substitution for the interest or dividend accrued or paid in
respect of Loaned Securities and that the tax treatment of such payment may
differ from the tax treatment of such interest or dividend.

If an installment, call or rights issue becomes payable on or in respect of any
Loaned Securities, State Street shall use all reasonable endeavors to ensure
that any timely instructions from the Client are complied with, but State Street
shall not be required to make any payment unless the Client has first placed it
in funds to make such payment.

7. Collateral. The Client authorizes State Street to receive and to hold, on the
Client's behalf, Collateral from Borrowers to secure the obligations of
Borrowers with respect to any loan of securities made on behalf of the Client
pursuant to the Securities Loan Agreements. All investments of cash Collateral
shall be for the account and risk of the Client. Concurrently with the delivery
of the Loaned Securities to the Borrower under any Loan, State Street shall
receive from the Borrower Collateral in any of the forms listed on Schedule 7.1.
Said Schedule may be amended from time to time by State Street upon written
notice to the Client. With respect to foreign cash Collateral, State Street will
provide Client with a multicurrency investment vehicle through which the foreign
cash will be converted to U.S. dollars and invested pursuant to Section 8 hereof
(MCIV"). Client acknowledges that State Street, in providing MCIV, will receive
additional compensation by earning a spread on the foreign currency conversions.
Such Collateral shall have a Market Value of not less than one hundred percent
(l00%) of the Market Value of the Loaned Securities. Thereafter, State Street
shall take such action as is appropriate with respect to the Collateral under
the applicable Securities Loan Agreement.

The Collateral shall be returned to Borrower at the termination of the
Loan upon the return of the Loaned Securities by Borrower to State Street in
accordance with the applicable Securities Loan Agreement. State Street shall

<PAGE>

invest cash Collateral in accordance with any directions, including any
limitations established by the Client in a writing identified to this Agreement
and acknowledged in writing by State Street and shall exercise reasonable care,
skill, diligence and prudence in the investment of Collateral. Subject to the
foregoing limits and standard of care, State Street does not assume any market
or investment risk of loss with respect to the currency conversions associated
with the use of MCIV or the investment of cash Collateral and if, at any time
during the term of any Loan, the value of the cash Collateral so invested is
insufficient to return the rebate fee (i.e., the return to the Borrower), the
full amount of the Collateral, U.S. dollar or otherwise or any and all other
amounts due to such Borrower pursuant to the Securities Loan Agreement, Client
shall be solely responsible for such shortfall and hereby agrees to pay an
amount equal to such shortfall to State Street. In addition, State Street shall
be entitled to charge Client's accounts for such shortfall in accordance with
Section 8.

8. Compensation for the Client and State Street. To the extent that a Loan is
secured by cash Collateral, such Collateral, including money received with
respect to the investment of the same, or upon the maturity, sale, or
liquidation of any such investments, shall be invested by State Street, subject
to the directions referred to above, if any, in short-term instruments, short
term investment funds maintained by State Street, money market mutual funds and
such other investments as State Street may from time to time to time select,
including without limitation investments in obligations or other securities of
State Street or of any State Street affiliate and investments in any short-term
investment fund, mutual fund, securities lending trust or other collective
investment fund with respect to which State Street and/or its affiliates provide
investment management or advisory, trust, custody, transfer agency, shareholder
servicing and/or other services for which they are compensated.

The Client acknowledges that interests in such mutual funds, securities lending
trusts and other collective investment funds, to which State Street and/or one
or more of its affiliates provide services are not guaranteed or insured by
State Street or any of its affiliates or by the Federal Deposit Insurance
Corporation or any government agency. The Client hereby authorizes State Street
to purchase or sell investments of cash Collateral to or from other accounts
held by State Street or its affiliates.

The net income generated by any investment made pursuant to the preceding
paragraph of this Section 8 shall be allocated among the Borrower, State Street,
and the Client, as follows: (a) a portion of such income shall be paid to the
Borrower in accordance with the agreement negotiated between the Borrower and
State Street; (b) the balance, if any, shall be split between State Street [as
compensation for its services in connection with this securities lending program
and the Client [as such income shall be credited to the Client's account], in
accordance with the fee schedule attached hereto as Schedule B.

In the event the net income generated by any investment made pursuant
to the first paragraph of this Section 8 does not equal or exceed the amount due
the Borrower in accordance with the agreement between Borrower and State Street,
State Street shall debit the Client's account by an amount equal to the
difference between the net income generated and the amounts to be paid to the
Borrower pursuant to the Securities Loan Agreement. In the event debits to the
Client's account produce a deficit therein, State Street shall sell or otherwise
liquidate investments made with cash Collateral and credit the net proceeds of
such sale or liquidation to satisfy the deficit. In the event the foregoing does
not eliminate the deficit, State Street shall have the right to charge the
deficiency to any other account or accounts maintained by the Client with State
Street.

<PAGE>

In the event of a Loan to a Borrower resident in Canada, which is made over
record date for a dividend reinvestment program ("DRP") and is secured by cash
Collateral, the Borrower shall pay the Client a substitute payment equal to the
full amount of the cash dividend declared, and may pay a loan premium, the
amount of which shall be negotiated by State Street, above the amount of the
cash dividend. Such loan premium shall be allocated between State Street and the
Client as follows: (a) a portion of such loan premium shall be paid to State
Street as compensation for its services in connection with this securities
lending program, in accordance with Schedule A and (b) the remainder of such
loan premium shall be credited to the Client's account.

To the extent that a Loan is secured by non-cash Collateral, the
Borrower shall be required to pay a loan premium, the amount of which shall be
negotiated by State Street. Such loan premium shall be allocated between State
Street and the Client as follows: (a) a portion of such loan premium shall be
paid to State Street as compensation for its services in connection with this
securities lending program, in accordance with Schedule A hereto; and (b) the
remainder of such loan premium shall be credited to the Client's account.

Client acknowledges that in the event that Client's participation in securities
lending generates income for the Client, State Street may be required to
withhold tax or may claim such tax from the Client as is appropriate in
accordance with applicable law.

The Client shall reimburse State Street for such reasonable fees and expenses
that State Street may incur in connection with the performance of its
obligations hereunder, including, without limitation: (i) the ordinary
telecommunication charges associated with the movement of securities in
connection with the securities lending activity contemplated by this Agreement;
and (ii) any and all funds advanced by State Street on behalf of the Client as a
consequence of the Client's obligations hereunder, including the Client's
obligation to return cash Collateral to the Borrower and to pay any fees due the
Borrower, all as provided in Section 7 hereof.

9. Fee Disclosure. The fees associated with the investment of cash Collateral in
funds maintained or advised by State Street are disclosed on Schedule B hereto.
Said Schedule may be replaced from time to time by State Street upon notice to
Client. An annual report with respect to such funds is available to the Client,
at no expense, upon request.

10. Recordkeeping and Reports. State Street will establish and maintain such
records as are reasonably necessary to account for Loans that are made and the
income derived therefrom. On a monthly basis, State Street will provide the
Client with a statement describing the Loans made, and the income derived from
Loans, during the period covered by such statement. Each party to this Agreement
shall comply with the reasonable requests of the other for information necessary
to the requester's performance of its duties in connection with this securities
lending program.

11. Standard of Care Subject to the requirements of applicable law, State Street
shall not be liable for any loss or damage, including counsel fees and court
costs, whether or not resulting from their acts or omissions to act hereunder or
otherwise, unless the loss damage arises out of State Street's own gross
negligence. Except for any liability, loss, or expense arising from or connected
with State Street's own gross negligence, the Client agrees to reimburse and
hold State Street harmless from and against any liability, loss and expense,
including counsel fees and expenses and court costs, arising in connection with
this Agreement or any Loan or arising from or connected with claims of any third
parties, including any Borrower, from and against all taxes and other
governmental charges, and from and against any out-of-pocket

<PAGE>

or incidental expenses. State Street may charge any amounts to which it is
entitled hereunder against the Client's account. Without limiting the generality
of the foregoing, Client agrees: (i) that State Street shall not be responsible
for any statements, representations or warranties which any Borrower makes in
connection with any securities loans hereunder, or for the performance by any
Borrower of the terms of a Loan, or any agreement related thereto, and shall not
be required to ascertain or inquire as to the performance or observance of, or a
default under the terms of, a Loan or any agreement related thereto; (ii) that
State Street shall be fully protected in acting in accordance with the oral or
written instructions of any person believed by State Street to be authorized to
execute this Agreement on behalf of the Client (an "Authorized Person"); (iii)
that in the event of a default by a Borrower under a Loan, State Street shall be
fully protected in acting in its sole discretion in a manner it deems
appropriate; and (iv) that the records of State Street shall be presumed to
reflect accurately any oral instructions given by an Authorized Person or a
person believed by State Street to be an Authorized Person.

State Street, in determining the Market Value of Securities, including without
limitation, Collateral, may rely upon any recognized pricing service and shall
not be liable for any errors made by such service.

12. Representations and Warranties. Each party hereto represents and warrants
that (a) it has the power to execute and deliver this Agreement, to enter into
the transactions contemplated hereby, and to perform its obligations hereunder;
(b) it has taken all necessary action to authorize such execution, delivery, and
performance; (c) this Agreement constitutes a legal, valid, and binding
obligation enforceable against it; and (d) the execution, delivery, and
performance by it of this Agreement will at all times comply with all applicable
laws and regulations. Client represents and warrants that (a) it has made its
own determination as to the tax treatment of any dividends, remuneration or
other funds received hereunder; and (b) the financial statements delivered to
State Street pursuant to Section 3 fairly present its financial condition and
there has been no material adverse change in its financial condition or the
financial condition of any parent company since the date of the balance sheet
included within such financial statements. Each Loan shall constitute a present
representation by Client that there has been no material adverse change in its
financial condition or the financial condition of any parent company that has
not been disclosed in writing to State Street since the date of the most recent
financial statements furnished to State Street pursuant to Section 3.

The person executing this Agreement on behalf of the Client represents that he
or she has the authority to execute this Agreement on behalf of the Client.

The Client hereby represents to State Street that: (i) its policies generally
permit it to engage in securities lending transactions; (ii) its policies permit
it to purchase shares of the Navigator Securities Lending Trust with cash
Collateral; (iii) its participation in the securities lending program, including
the investment of cash collateral in the Navigator Securities Lending Trust, and
the existing series' thereof, has been approved by a majority of the directors
or trustees that are not "interested persons" within the meaning of section
2(a)(19) of the Investment Company Act of 1940, and such directors or trustees
will evaluate the securities lending program no less frequently than annually to
determine that the investment of cash collateral in the Navigator Securities
Lending Trust, including any series thereof, is in the Client's best interest
and (iv) its prospectus provides appropriate disclosure concerning its
securities lending activity; and (v) that it is not subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") with respect to
this Agreement and the Securities. The Client also hereby represents that it
qualifies as an "accredited investor"

<PAGE>

within the meaning of Rule 501 of Regulation D under the Securities Act of 1933,
as amended.

13. Definitions. For the purposes hereof:

(a) "Available Securities" means the securities of the Client that are available
for Loans pursuant to Section 2.

(b) "Borrower" means any of the entities to which Available Securities may be
loaned under a Securities Lending Agreement, as described in Section 3.

(d) "Investment Manager," when used in any provision, means the person or entity
who has discretionary authority over the investment of the Available Securities
to which the provision applies.

(e) "Loan" means a loan of Available Securities to a Borrower.

(f) "Loaned Security" shall mean any "security" which is delivered as a Loan
under a Securities Loan Agreement; provided that, if any new or different
security shall be exchanged for any Loaned Security by recapitalization, merger,
consolidation, or other corporate action, such new or different security shall,
effective upon such exchange, be deemed to become a Loaned Security in
substitution for the former Loaned Security for which such exchange was made.

(g) "Market Value" of a security means the market value of such security
(including, in the case of a Loaned Security that is a debt security, the
accrued interest on such security) as determined by the independent pricing
service designated by State Street, or such other independent sources as may be
selected by State Street on a reasonable basis.

(h) "Securities Loan Agreement" means the agreement between a Borrower and State
Street (on behalf of the Client) that governs Loans, as described in Section 4.

14. Continuing Agreement; Termination; Remedies. It is the intention of the
parties hereto that this Agreement shall constitute a continuing agreement in
every respect and shall apply to each and every Loan, whether now existing or
hereafter made. The Client and State Street may each at any time terminate this
Agreement upon five (5) Business Days' written notice to the other to that
effect. The only effects of any such termination of this Agreement will be that
(a) following such termination, no further Loans shall be made hereunder by
State Street on behalf of the Client, and (b) State Street shall, within a
reasonable time after termination of this Agreement, terminate any and all
outstanding Loans. The provisions hereof shall continue in full force and effect
in all other respects until all Loans have been terminated and all obligations
satisfied as herein provided.

15. Notices. Except as otherwise specifically provided herein, notices under
this Agreement may be made orally, in writing, or by any other means mutually
acceptable to the parties. If in writing, a notice shall be sufficient if
delivered to the party entitled to receive such notices at the following
addresses:

If to Client:

Bull & Bear Advisers

<PAGE>

11 Hanover Square
New York, N.Y. 10005
Attn: Thomas B. Winmill
President

If to State Street:

State Street Bank and Trust Company
Global Securities Lending Division
Two International Place, Floor 31
Boston, Massachusetts 02110

or to such other addresses as either party may furnish the other party by
written notice under this section.

Whenever this Agreement permits or requires the Client to give notice to,
direct, provide information to State Street, such notice, direction, or
information shall be provided to State Street on the Client's behalf by any
individual designated for such purpose by the Client in a written notice to
State Street. (This Agreement shall be considered such a designation of the
person executing the Agreement on the client's behalf.) After its receipt of
such a notice of designation, and until its receipt of a notice revoking such
designation, State Street shall be fully protected in relying upon the notices,
directions, and information given by such designee.

16. Miscellaneous. This Agreement supersedes any other agreement between the
parties or any representations made by one party to the other, whether oral or
in writing, concerning loans of securities by State Street on behalf of the
Client. This Agreement shall not be assigned by either party without the prior
written consent of the other party. Subject to the foregoing, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective heirs, representatives, successors, and assigns. This Agreement
shall be governed and construed in accordance with the laws of the Commonwealth
of Massachusetts. Client hereby irrevocably submits to the jurisdiction of any
Massachusetts state or federal court sitting in The Commonwealth of
Massachusetts in any action or proceeding arising out of or related to this
agreement, hereby irrevocably agrees that all claims in respect of such action
or proceeding may be heard and determined in such Massachusetts state or Federal
court except that this provision shall not preclude any party from removing any
action to federal court. Client hereby irrevocably waives, to the fullest extent
it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. Client hereby irrevocably appoints as
its agent to receive on its behalf service of copies of the summons and
complaint and any other process which may be served in any such action or
proceeding (the "Process Agent"). Such service may be made by mailing or
delivering a copy of such process, in care of the Process Agent at the above
address. Client hereby irrevocably authorizes and directs the Process Agent to
accept such service on its behalf. As an alternative method of service, Client
also irrevocably consents to the service of any and all process in any such
action or proceeding by the mailing of copies of such process to Client at its
address specified in Section 15 hereof. Client agrees that a final judgment

<PAGE>

in any such action or proceeding, all appeals having been taken or the time
period for such appeals having expired, shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided
by law. The provisions of this Agreement are severable and the invalidity or
unenforceability of any provision hereof shall not affect any other provision of
this Agreement. If in the construction of this Agreement any court should deem
any provision to be invalid because of scope or duration, then such court shall
forthwith reduce such scope or duration to that which is appropriate and enforce
this Agreement in its modified scope or duration.

17. Securities Investors Protection Act of 1970 Notice. CLIENT IS
HEREBY ADVISED AND ACKNOWLEDGES THAT THE PROVISIONS OF THE SECURITIES INVESTOR
PROTECTION ACT OF 1970 MAY NOT PROTECT THE CLIENT WITH RESPECT TO THE LOAN OF
SECURITIES HEREUNDER AND THAT, THEREFORE, THE COLLATERAL DELIVERED TO THE CLIENT
MAY CONSTITUTE THE ONLY SOURCE OF SATISFACTION OF THE BROKER'S OR DEALER'S
OBLIGATION IN THE EVENT THE BROKER OR DEALER FAILS TO RETURN THE SECURITIES.

18. Modification. This Agreement shall not be modified, except by an
instrument in writing signed by the party against whom enforcement is sought.

<PAGE>

BULL & BEAR FUNDS I, INC. on behalf BULL & BEAR FUNDS II, INC.on of its
series BULL & BEAR U.S. AND behalf of its series
OVERSEAS FUND BULL & BEAR DOLLAR RESERVES

By: _____________________ By: ____________________

Name: ___________________ Name: _________________

Its: ______________________ Its: ___________________

BULL & BEAR GOLD INVESTORS LTD. BULL & BEAR SPECIAL
EQUITIES FUND, INC.

By: ______________________ By: _______________________

Name: ___________________ Name: ____________________

Its: ______________________ Its: ______________________

BULL & BEAR MUNICIPAL INCOME BULL & BEAR GLOBAL
FUND, INC. INCOME FUND, INC.

By: ______________________ By: ______________________
Name: ___________________ Name: ___________________
Its: ______________________ Its: ______________________

<PAGE>

BULL & BEAR U.S. GOVERNMENT MIDAS FUND, INC.
SECURITIES FUND, INC.

By: ________________________ By: _______________________

Name: _____________________ Name: ____________________

Its: ________________________ Its: ______________________

ROCKWOOD FUND, INC. STATE STREET BANK AND
TRUST COMPANY

By: _____________________ By: ____________________

Name: ___________________ Name: __________________

Its: ______________________ Its: ____________________

<PAGE>

SCHEDULE A

This Schedule is attached to and made part of the
Securities Lending Authorization Agreement,
dated the ____day of _______, 1997
between THE CLIENTS IDENTIFIED ON SCHEDULE A (each a "Client" or collectively
"Clients") and
STATE STREET BANK AND TRUST COMPANY ("State Street").

PARTIES TO THE SECURITIES LENDING AUTHORIZATION AGREEMENT

BULL & BEAR FUNDS I, INC. (TIN 13-3368373), on behalf of its series BULL &
BEAR U.S. AND OVERSEAS FUND

BULL & BEAR FUNDS II, INC. (TIN 22-2037796), on behalf of its series BULL &
BEAR DOLLAR RESERVES (TIN 13-6900645)

BULL & BEAR GOLD INVESTORS LTD. (TIN 13-6059519)

BULL & BEAR SPECIAL EQUITIES FUND, INC. (TIN 13-3343918)

BULL & BEAR MUNICIPAL INCOME FUND, INC. (TIN 13-3196171)

BULL & BEAR GLOBAL INCOME FUND, INC. (TIN 13-3926714)

BULL & BEAR U.S. GOVERNMENT SECURITIES FUND, INC. (TIN 13-3907058)

MIDAS FUND, INC. (TIN 41-1536110)

ROCKWOOD FUND, INC. (TIN 82-0395554)

<PAGE>

SCHEDULE B

This Schedule is attached to and made part of the
Securities Lending Authorization Agreement,
dated the ____ day of _______, 1997
between THE CLIENTS IDENTIFIED ON SCHEDULE A (each a "Client" or collectively
"Clients") and
STATE STREET BANK AND TRUST COMPANY ("State Street").

SCHEDULE OF FEES

1. Subject to Paragraph 2 below, all proceeds collected by State Street on
investment of Cash Collateral or any fee income shall be allocated as follows

- - Sixty-five percent (65%) payable to the Client, and

- - Thirty-five percent (35%) payable to State Street.

2. All payments to be allocated under Paragraph 1 above shall be made after
deduction of such other amounts payable to State Street or to the Borrower under
the terms of the attached Securities Lending Authorization Agreement.

3. Investment Management Fees

The Navigator Securities Lending Trust:

On an annualized basis, the management/trust/custody fee for investing cash
Collateral in the Navigator Securities Lending Prime Portfolio is not more than
10.00 basis points netted out of yield. The trustee may pay out of the assets of
the Portfolio all reasonable expenses and fees of the Portfolio, including
professional fees or disbursements incurred in connection with the operation of
the Portfolio.

<PAGE>

SCHEDULE 7.1

ACCEPTABLE FORMS OF COLLATERAL

- - Cash (U.S. and foreign currency);

- - Securities issued or guaranteed by the United States government or its
agencies;

- - Sovereign debt rated A or better

- - Convertible Bonds

- - Irrevocable bank letters of credit issued by a person other than the Borrower
or an affiliate of the Borrower may be accepted as Collateral, if State Street
has determined that it is appropriate to accept such letters of credit as
Collateral under the securities lending programs it administers; and

- - Such other Collateral as the parties may agree to in writing from time
to time.

[DESCRIPTION] Segregated Account Procedural Agreement

SEGREGATED ACCOUNT PROCEDURAL AND SAFEKEEPING AGREEMENT

THIS AGREEMENT is made effective the 17th day of June, 1997, by and
between INVESTORS FIDUCIARY TRUST COMPANY, a trust company chartered under the
laws of the state of Missouri, having its trust office and principal place of
business in Kansas City, Missouri ("IFTC"); STATE STREET BANK AND TRUST COMPANY,
a trust company organized under the laws of the Commonwealth of Massachusetts,
having its trust office and principal place of business in North Quincy,
Massachusetts ("Bank"); SMITH BARNEY, INC., a registered futures commission
merchant ("Broker"); and each registered investment company listed on Schedule A
hereto, as it may be amended from time to time, incorporated herein by this
reference (each a "Customer"); and

WHEREAS, Customer, on behalf of each of the Portfolios identified in
Schedule A, as it may be amended from time to time, incorporated herein by this
reference, has opened or may hereafter open a trading account with Broker for
the purpose of purchasing and selling futures contracts and related options
("Contracts") through Broker; and

WHEREAS, in connection with the opening of such trading account,
Customer and Broker have entered or will enter into a Customer Agreement
requiring Customer to deposit as collateral the initial margin (including
subsequent margin calls and any additional initial margin requirements for short
option positions) ("Margin") with respect to each Contract as required by the
Commodity Exchange Act, Commodity Futures Trading Commission regulations, and
the rules and regulations of the Chicago Mercantile Exchange, the Chicago Board
of Trade, the Commodity Exchange, and such other exchanges on which Broker may
effect or cause to be effected transactions as broker for Customer (collectively
the "Rules and Regulations"); and

WHEREAS, IFTC serves as custodian of certain monies and securities
owned by Customer ("Assets") pursuant to a Custody Agreement between IFTC and
Customer (each a "Custody Agreement"); and

WHEREAS, Bank serves as IFTC's sub-custodian of said Assets pursuant to
a Sub-Custody Agreement between Bank and IFTC (the "Sub-Custody Agreement"); and

WHEREAS, the parties hereto desire to provide for segregated accounts
for the benefit of Customer to be established at Bank (the "Safekeeping
Accounts") for custody of the Margin;

NOW, THEREFORE, for and in consideration of the mutual promises
contained herein, the parties hereto, intending to be legally bound, mutually
covenant and agree as follows:

1. GOVERNING AGREEMENT. As between each Customer and IFTC, the Assets in the
Safekeeping Account as collateral for the Margin ("Collateral") and all
instructions, deliveries, duties, rights and liabilities of such Customer and
IFTC with respect to such Safekeeping Account shall be governed in all respects
by the Custody Agreement, except as expressly provided otherwise in this
Agreement. As between IFTC and Bank, the Collateral and all instructions,
deliveries, duties, rights and liabilities of IFTC and Bank with respect to the
Safekeeping Accounts shall be governed in all respects by the Sub-Custody
Agreement, except as expressly provided otherwise in this Agreement.

2. SAFEKEEPING ACCOUNT. Pursuant to the applicable Custody Agreement, IFTC shall
establish and maintain a Safekeeping Account at Bank for each Customer, and,
pursuant to the Sub-Custody Agreement, Bank shall open, upon instruction from
IFTC, such Safekeeping Account in the name of "Smith Barney Customer Funds for
the benefit of [applicable Customer Name] (Customer Segregated Account)"

<PAGE>

for the Collateral, in accordance with the Rules and Regulations. In its
custodial capacity, IFTC is limited to holding the Collateral in safekeeping for
Customer pursuant to the Custody Agreement and dealing with it as herein
expressed unless otherwise mutually agreed in writing. IFTC shall make or cause
Bank to make purchases, sales, withdrawals and deliveries of securities held as
Collateral only as Customer may direct, subject to the rights of Broker
hereunder. IFTC is hereby authorized and directed to, and to cause Bank to:

A. Collect income and principal on bearer securities in the
Safekeeping Accounts;

B. Dispose of the monies received from income collections,
maturity, redemption, sale, or other disposition of the Assets
pursuant to the terms hereof;

C. Send daily confirmations of receipts and disbursements to
Customer and to Broker;

D. Provide monthly lists of Assets held in the Safekeeping
Accounts to Customer and to Broker;

E. On request, confirm to Broker and Customer all account charges
and positions; and

F. Provide Broker and Customer with prompt Written Notice, as
hereinafter defined, of each transfer of Collateral into or
out of the Safekeeping Account of such Customer.

Bank may hold Assets in the Safekeeping Account in bearer, nominee, book entry,
or other form and in any depository or clearing corporation, with or without
indicating that such Assets are held hereunder; provided, however, that all
Assets held in the Safekeeping Account shall be identified on IFTC's and Bank's
records as subject to this Agreement and shall be in a form that permits
transfer without additional authorization or consent of Customer.

Pursuant to Section 1.20 of the Commodity Futures Trading Commission
Regulations, IFTC and Bank hereby acknowledge that all Collateral is that of a
"commodity or option" customer of Broker and is being separately accounted for
and held as segregated and secured funds. Such Collateral will not be treated by
IFTC or Bank as the funds or securities of any person other than Customer, and
will not be used by IFTC or Bank in connection with the obligations of any
person other than Customer. IFTC and Bank have no claim, and will assert no
lien, right of set off or any other claim or interest in the Collateral, and
will not use the Collateral to margin, collateralize, secure or to extend credit
to Customer, to any of its affiliates, to Broker, to any of Broker's affiliates
or to any other persons for such activities or otherwise. IFTC and Bank hereby
agree that the books and records accounting for the Collateral may be examined
by an authorized employee of the Commodity Futures Trading Commission.

<PAGE>

3. DEPOSIT OF COLLATERAL. IFTC shall direct Bank to deposit, transfer and
maintain assets specified by Customer by Written Notice as Collateral in the
Safekeeping Account in an amount sufficient to provide such Margin as shall be
required by the Rules and Regulations, and Bank shall provide Broker and IFTC
with Written Notice of each such deposit. Customer may deposit amounts in excess
of such requirements. The designation "Customer Funds" in the account title is
intended to indicate the status of the Safekeeping Accounts under the Rules and
Regulations; however, to the extent not inconsistent with such Rules and
Regulations, the provisions of this Agreement shall be controlling as to the
rights of the parties in the Collateral.

4. FORM OF COLLATERAL. The Collateral shall be in the form, as Customer elects,
of cash, of eligible securities of the U.S. Government (valued at the current
market value), other securities issued by United States issuers as Broker shall
accept, or of a combination thereof. Customer may substitute U.S. Government
securities of equal or greater value upon prior approval by Broker, which
approval shall not be unreasonably withheld. Upon receipt of such substitute
securities and Written Notice of Broker's approval, IFTC shall cause Bank to
release from the Safekeeping Account cash or securities of an equal value, or
such lesser amount as may be directed by Customer. Separate interest payments on
the Collateral shall be automatically credited by IFTC in Federal Funds to
demand deposit accounts designated in Written Notice from Customer on the date
that such interest becomes due and received unless Notice of Default has been
given to IFTC pursuant to Paragraph 7. Amounts due on Assets which mature or are
redeemed will be credited to the applicable Safekeeping Account in Federal Funds
on the date such amounts are received.

5. WITHDRAWALS. Withdrawals from the Safekeeping Account shall be effected upon
receipt by Bank of Written Notice from Customer and Broker's prior written
consent to such withdrawal. Broker shall, upon request of Customer, inform
Customer of the amount of any excess Collateral in the Safekeeping Account.

6. VARIATION MARGIN. If additional Collateral is required by Broker due to
variation in the value of one or more Contracts held in the trading account or
otherwise pursuant to the Customer Agreement ("Variation Margin"):

A. Broker shall give Customer Written Notice of such requirement
and such Variation Margin shall be satisfied from any amounts
currently credited to Customer's trading account, to the
extent thereof.

B. If the Variation Margin cannot be satisfied as set forth in
Paragraph A, then Customer shall immediately transfer the
Variation Margin to Broker and Broker shall give Customer
prompt Written Notice of receipt.

C. If the Variation margin is not satisfied as set forth in Paragraphs
A or B, then, Broker may give notice to IFTC of the failure to deposit or pay
such amount and the amount required, which notice shall state that all
conditions precedent to Broker's right to receive Collateral have been
satisfied. Immediately upon receipt of such notice, IFTC shall transfer
Collateral of such specified amount from the Safekeeping Account to
or for the account of Broker.

7. DEFAULT. If Customer has failed to deposit sufficient Collateral pursuant to
Paragraph 3 hereof, or transfer the required Variation Margin pursuant to
Paragraph 6.B hereof, Broker shall give Customer immediate Written Notice of
such failure, specifying the amount of such default ("Notice of Default"). In
the event that Broker gives Notice of Default to IFTC, Broker shall immediately
give

<PAGE>

Written Notice to Customer thereof and, without prejudice to any rights of
Broker hereunder, IFTC shall give Written Notice to Customer of its receipt of,
and the instructions, if any, contained in, such Notice of Default. The Notice
of Default by Broker to IFTC shall certify that all conditions precedent to
Broker's right to direct disposition of Collateral hereunder have been
satisfied, and shall include instructions to IFTC to instruct Bank:

A. To transfer specified eligible U.S. Government securities or other
securities held as Collateral to Broker, in which event Broker shall
have the right to sell or otherwise dispose of such securities in
the principal market for such securities or, in the event such
principal market is closed, in a manner commercially reasonable for
such securities; provided, however, that Broker shall remit to
Customer any proceeds of such sale or disposition in excess of the
amount specified in the Notice of Default;

B. To sell at the prevailing market price sufficient Collateral to
provide for payment to Broker of the amount specified in the Notice
of Default, in which event Bank shall give consideration to any
timely request by Customer by Written Notice with respect to
particular Collateral to be sold and shall sell any Collateral in
the principal market therefor, or, in the event such principal
market is closed, in a manner commercially reasonable for such
Collateral; or

C. With respect to cash Collateral, to immediately transfer cash
in the amount specified in the Notice of Default from the
Safekeeping Account to Broker.

IFTC shall cause Bank to retain in the Safekeeping Account any Collateral not
transferred as set forth above, including any proceeds from the Bank's sale of
Collateral in excess of the amount required. In no event shall IFTC or Bank be
required to transfer any amount in excess of the value of the Collateral.

8. CREDITS TO CUSTOMER. Broker shall promptly credit to the trading account of
Customer any Variation Margin resulting from the variation in value of one or
more Contracts purchased or sold by Customer in accordance with the Rules and
Regulations. Each business day such a credit is made, Broker shall transfer
trading account balances of Customer in Federal Funds to IFTC, or to such other
bank account in Customer's name as Customer shall direct. Amounts due to a
Customer as a result of the variation in value of such Customer's short option
positions shall be credited to Customer by reducing the amount of Collateral
required to be maintained in the Safekeeping Account.

9. LIMITATION OF LIABILITY.

a. IFTC and Bank shall not be responsible or liable for, and
Customer and Broker shall indemnify and hold IFTC and Bank
harmless from and against, any and all costs, expenses,
losses, damages, charges, counsel fees, payments and
liabilities which may be asserted against or incurred by IFTC
or Bank or for which IFTC or Bank may be held to be liable,
arising out of or attributable to:

<PAGE>

i. IFTC's or Bank's action or omission to act pursuant
hereto; provided that IFTC or Bank have acted in good
faith and with due diligence and reasonable care; and
provided further, that IFTC shall not be liable for
consequential, special, or punitive damages in any
event.

ii. IFTC's action or omission to act hereunder upon any Written
Notice, instructions, advice, notice, request, consent,
certificate or other instrument or paper reasonably appearing
to it to be genuine and to have been properly executed,
including but not limited to instructions contained in a
Notice of Default, it being expressly understood that IFTC and
Bank shall have no duty to determine whether a default has, in
fact, occurred, or any other duty of inquiry or verification
with respect thereto.

iii. Customer's or Broker's refusal or failure to comply
with the terms hereof (including without limitation
failure to pay or reimburse IFTC or Bank and under
Section 9 hereof), Customer's or Broker's acts or
omissions, negligence or willful misconduct, or the
failure of any representation or warranty of Customer
or Broker hereunder to be and remain true and correct
in all respects at all times.

iv. The failure or delay in performance of its obligations
hereunder, or those of any entity for which it is responsible
hereunder, arising out of or caused, directly or indirectly,
by circumstances beyond the affected entity's reasonable
control, including, without limitation: any interruption,
loss or malfunction of any utility, transportation, computer
(hardware or software) or communication service; inability to
obtain labor, material, equipment or transportation, or a
delay in mails; governmental or exchange action, statute,
ordinance, rulings, regulations or direction; war, strike,
riot, emergency, civil disturbance, terrorism, vandalism,
explosions, labor disputes, freezes, floods, fires, tornados,
acts of God or public enemy, revolutions, or insurrection.

v. The sufficiency or adequacy of the Collateral deposited
hereunder from time to time, or compliance with any statute or
regulation regarding the amount and form of Collateral, it
being understood that IFTC and Bank shall have no duty to
require any Assets to be delivered at any time, or the
establishment or maintenance of margin credit, including but
not limited to the Rules and Regulations, Regulations T or X
of the Board of Governors of the Federal
Reserve System, or with any rules or regulations of the
Options Clearing Corporation or the Securities and Exchange
Commission.

b. Broker shall not be responsible or liable for any loss
incurred by any Customer by reason of IFTC's or Bank's
negligence or willful misconduct in performing their duties
under this Agreement.

<PAGE>

10. NOTICE. All notices, instructions and communications shall be given by the
most expeditious means possible and shall be deemed a valid "Written Notice"
hereunder if delivered by hand, sent by registered or certified mail (return
receipt requested), transmitted by telegraph, telex or telecopier (receipt
confirmed) or given by telephone (promptly followed by written copy) and shall
be deemed effective when given if given by telephone and when received by the
addressee at the address set forth opposite its signature hereto or at such
other address given by Written Notice if given in a manner other than by
telephone.

11. FEES AND EXPENSES. Customer shall pay as compensation to IFTC for its
services hereunder such amount as may be agreed to by Customer and IFTC from
time to time in writing. Any and all expenses of establishing, maintaining, or
terminating a Safekeeping Account shall be borne by the applicable Customer.

12. TERMINATION. As to each Safekeeping Account, this Agreement shall terminate:
(a) on the effective date of IFTC's or Bank's resignation or termination as
custodian or sub-custodian (b) upon the consent by Written Notice of Customer
and Broker, or (c) upon thirty (30) days prior written notice by IFTC and Bank
to Broker and Customer. Upon any termination, all Assets in the Safekeeping
Account shall be held by Bank pursuant to the Sub-Custody Agreement.

13. INDIVIDUAL CUSTOMERS. Each Customer shall be regarded for all purposes as a
separate party apart from any other Customer and every reference to Customer
shall be deemed a reference solely to the particular Customer to which a
particular transaction under the Agreement relates. Under no circumstances shall
the rights, obligations or remedies with respect to a particular Customer
constitute a right, obligation or remedy applicable to any other Customer. The
use of this single document to memorialize the separate agreement of each
Customer is understood to be for clerical convenience only and shall not
constitute any basis for joining Customers for any reason.

14. MISCELLANEOUS.

a. This Agreement shall be construed according to, and the rights
and liabilities of the parties hereto shall be governed by,
the laws of the State of New York, without reference to the
choice of laws principles thereof.

b. All terms and provisions hereof shall be binding upon, inure
to the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns.

<PAGE>

c. The representations and warranties, the indemnifications
extended hereunder, and the provisions of Section 9 hereof are
intended to and shall continue after and survive the
expiration, termination or cancellation hereof.

d. No provisions hereof may be amended or modified in any manner
except by a written agreement properly authorized and executed
by each party hereto.

e. The failure of either party to insist upon the performance of any
terms or conditions hereof or to enforce any rights resulting from
any breach of any of the terms or conditions hereof, including the
payment of damages, shall not be construed as a continuing or
permanent waiver of any such terms, conditions, rights or
privileges, but the same shall continue and remain in full force and
effect as if no such forbearance or waiver had occurred. No waiver,
release or discharge of any party's rights hereunder shall be
effective unless contained in a written instrument signed by the
party sought to be charged.

f. The captions herein are included for convenience of reference
only, and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect.

g. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

h. If any provision hereof shall be determined to be invalid,
illegal, in conflict with any law or otherwise unenforceable,
the remaining provisions hereof shall be considered severable
and shall not be affected thereby, and every remaining
provision hereof shall remain in full force and effect and
shall remain enforceable to the fullest extent permitted by
applicable law.

i. This Agreement may not be assigned by any party hereto without
the prior written consent of the other party.

j. Neither the execution nor performance hereof shall be deemed
to create a partnership or joint venture by and among any of
the parties hereto.

k. Except as specifically provided herein, this Agreement does
not in any way affect any other agreements entered into among
the parties hereto and any actions taken or omitted by either
party hereunder shall not affect any rights or obligations of
the other party hereunder.

<PAGE>

IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed on the date first above written.

Bull & Bear Global Income Fund, Inc.:
Bull & Bear Funds I, Inc.:
Bull & Bear Funds II, Inc.:
Bull & Bear U.S. Government
Securities Fund, Inc.
Bull & Bear Special Equities Fund, Inc.
Bull & Bear Gold Investors Ltd.
Bull & Bear Municipal Income Fund, Inc.
Midas Fund, Inc.
Rockwood Fund, Inc.

Bull & Bear By:
11 Hanover Square, 11th Floor Title:
New York, NY 10005
Attn: Heidi Keating

Smith Barney, Inc. SMITH BARNEY, INC.
388 Greenwich Street By:
New York, NY 10013 Title:
Attn: Michael Schaefer

127 West 10th Street INVESTORS FIDUCIARY TRUST COMPANY
Kansas City, MO 64105 By:
Attn: Custody Department Title:

1776 Heritage Drive STATE STREET BANK AND TRUST COMPANY
North Quincy, MA 02171 By:
Attn: Securities Services Division Title:

<PAGE>

SCHEDULE A
LIST OF CUSTOMERS

Portfolios of Customer under the Segregated Account Procedural and Safekeeping
Agreement with Smith Barney, Inc. ("Broker").

CUSTOMER AND PORTFOLIO NAME TAX ID NUMBER
--------------------------- ---------------------
Bull & Bear Funds I, Inc.:
Bull & Bear U.S. and Overseas Fund 13-3368373
Bull & Bear Funds II, Inc.:
Bull & Bear Dollar Reserves 13-6900645
Bull & Bear U.S. Government Securities Fund, Inc. 13-3907058
Bull & Bear Special Equities Fund, Inc. 13-3343918
Bull & Bear Gold Investors Ltd. 13-6059519
Bull & Bear Municipal Income Fund, Inc. 13-3196171
Midas Fund, Inc. 41-1536110
Rockwood Fund, Inc. 82-0395554
Bull & Bear Global Income Fund, Inc. 13-3926714

Customer is a series investment company currently consisting of the Portfolios
set forth above. For purposes of the Segregated Account Procedural and
Safekeeping Agreement, each Portfolio shall be regarded for all purposes
hereunder as a separate party apart from each other Portfolio. Unless the
context otherwise requires, with respect to every transaction covered hereby,
every reference herein to Customer shall be deemed to relate solely to the
particular Portfolio to which such transaction relates. Under no circumstances
shall the rights, obligations or remedies with respect to a particular Portfolio
constitute a right, obligation or remedy applicable to any other Portfolio. The
use of this single document to memorialize the separate agreement of each
Portfolio is understood to be for clerical convenience only and shall not
constitute any basis for joining the Portfolios for any reason.

Customer may add additional Portfolios to the Segregated Account Procedural and
Safekeeping Agreement from time to time by written notice to the other parties,
provided that IFTC consents to such addition. Rates or charges for each
additional Portfolio shall be as agreed upon by IFTC and Customer in writing.

[DESCRIPTION] Custodial Account and IRA Disclosure Statement

Investor Service Center, Inc.
Toll-free 1-888-503-FUND (3863)

- --------------------------------------------------------------------------------

IRA Information Kit
Regular o Rollover o Roth o SEP o SAR-SEP
<PAGE>

Table of Contents

Questions and Answers about IRAs........................................... 1
How to Get Started......................................................... 3
Application for Regular, Rollover
and Roth IRAs, SEPs, and SAR-SEPs.......................................... 5
IRA Transfer, Direct Rollover & Conversion Form............................ 7
Authorization to Add or Convert to a Roth IRA or Other IRA................. 9
Disclosure Statement....................................................... 11
Account Custodial Agreement................................................ 23

<PAGE>

Questions and Answers about IRAs

What's new in the world of IRAs?
An Individual Retirement Account ("IRA") has always provided an attractive
means to save money for the future on a tax-advantaged basis. Recent changes to
Federal tax law have now made the IRA an even more flexible investment and
savings vehicle. Among the new changes is the creation of the Roth Individual
Retirement Account ("Roth IRA"), which is available for use after January 1,
1998. Under a Roth IRA, the earnings and interest on an individual's
nondeductible contributions grow without being taxed, and distributions may be
tax-free under certain circumstances. Most taxpayers (except for those with very
high income levels) will be eligible to contribute to a Roth IRA. A Roth IRA can
be used instead of a Regular IRA, to replace an existing Regular IRA, or
complement a Regular IRA you wish to continue maintaining.
Taxpayers with adjusted gross income of up to $100,000 are eligible to
convert existing IRAs into Roth IRAs. The details on conversion are found in the
description of Roth IRAs in this Kit.
Congress has also made significant changes to Regular IRAs. First, Congress
increased the income levels at which IRA holders who participate in
employer-sponsored retirement plans can make deductible Regular IRA
contributions. Also, the rules for deductible contributions by an IRA holder
whose spouse is a participant in an employer-sponsored retirement plan have been
liberalized. Second, the 10% penalty tax for premature withdrawals (before age
59 1/2) will no longer apply in the case of withdrawals to pay certain higher
education expenses or certain first-time homebuyer expenses.

What's in this Kit?
In this Kit you will find detailed information about Roth IRAs and about the
changes that have been made to Regular IRAs. You will also find all you need to
establish and maintain a Regular, Roth IRA, SEP IRA, SAR-SEP IRA, or to convert
all or part of an existing Regular IRA to a Roth IRA.
The beginning of this Kit contains the instructions and forms you will need
to open a new Regular or Roth IRA, to transfer from another IRA to an Investor
Service Center IRA, or to convert a Regular IRA to a Roth IRA.
The next section of this Kit contains our IRA Disclosure Statement. The
Disclosure Statement is divided into three parts:
o Part One describes the basic rules and benefits which are specifically
applicable to your Regular IRA.
o Part Two describes the basic rules and benefits which are specifically
applicable to your Roth IRA. o Part Three describe rules and information
applicable to all IRAs.

The last section of this Kit contains the IRA Custodial Agreement. The
Custodial Agreement is also divided into three parts:
o Part One contains provisions specifically applicable to Regular IRAs.
o Part Two contains provisions specifically applicable to Roth IRAs.
o Part Three contains provisions applicable to all IRAs (Regular and Roth).

What's the difference between a Regular IRA and a Roth IRA?
With a Regular IRA, an individual can contribute up to $2,000 per year and
may be able to deduct the contribution from taxable income, reducing income
taxes. Taxes on investment growth and dividends are deferred until the money is
withdrawn. Withdrawals are taxed as additional ordinary income when received.
Nondeductible contributions, if any, are withdrawn tax-free. Withdrawals before
age 59 1/2 are assessed a 10%

<PAGE>

penalty in addition to income tax, unless an exception applies.
With a Roth IRA, the contribution limits are essentially the same as Regular
IRAs, but there is no tax deduction for contributions. All dividends and
investment growth in the account are tax-free. Most important with a Roth IRA:
there is no income tax on qualified withdrawals from your Roth IRA.
Additionally, unlike a Regular IRA, there is no prohibition on making
contributions to Roth IRAs after turning age 70 1/2, and there's no requirement
that you begin making minimum withdrawals at that age.
The following chart highlights some of the major differences between a
Regular IRA and a Roth IRA:

Characteristics Regular IRA Roth IRA
- --------------- ---------------------------------- -----------------------------------
<S> <C> <C>
Eligibility o Individuals (and their spouses) o Individuals (and their spouses) who receive
who receive compensation compensation
o Individuals age 70 1/2 and over o Individuals age 70 1/2 and over may
may contribute contribute

Tax Treatment of
Contributions o Subject to limitations, contributions o No deduction permitted for amounts
are deductible contributed

Contribution of Limits o Individuals may contribute up o Individuals may generally
to $2000 annually (or 100% of contribute up to $2000 (or 100% of
compensation, if less) compensation, if less)

o Deductibility depends on income level o Ability to contribute phases out at income
for individuals who are active participants levels of $95,000 to $110,000(individual
in an employer-sponsored retirement plan taxpayer) and $150,000 to $160,000
(married taxpayers)

o Overall limit for contributions to all IRAs
(Regular and Roth combined) is $2,000
annually (or 100% of compensation, if less)

Earnings o Capital appreciation and dividends are not o Capital appreciation and dividends are not
taxed in your IRA taxed in your IRA

Rollover/Conversions o Individual may rollover tax free to o Rollovers from other Roth IRA's or Regular
Regular IRA amounts held in IRA's only
employer-sponsored retirement
arrangements (401(k), SEP IRA, etc.) o Amounts rolled over (or converted) from
another Regular IRA are subject to
income tax in the year rolled over or converted

o Tax on amounts rolled over or converted in 1998
is spread over four year period (1998-2001)

Withdrawals o Total (contributions + earnings) o Not taxable as long as a qualified distribution
taxable as income in year withdrawn - generally, account open for 5 years, and age 59 1/2
(except for any prior non-deductible
contributions)

o Minimum withdrawals must begin after o Minimum withdrawals not required after
age 70 1/2 age 70 1/2
</TABLE>

<PAGE>

Is a Roth or a Regular IRA right for me?
We cannot act as your legal or tax advisor and so we cannot tell you which
kind of IRA is right for you. The information contained in this Kit is intended
to provide you with the basic information and material you will need if you
decide whether a Regular or Roth IRA is better for you, or if you want to
convert an existing Regular IRA to a Roth IRA. We suggest that you consult with
your accountant, lawyer or other tax advisor, or with a qualified financial
planner, to determine whether you should open a Regular or Roth IRA or convert
any or all of an existing Regular IRA to a Roth IRA. Your tax advisor can also
advise you as to the state tax consequences that may affect whether a Regular or
Roth IRA is right for you.

What about SEP IRAs and SAR-SEP IRAs?
The Investor Service Center Regular IRA may be used in connection with a
simplified employee pension (SEP) or SEP Employer Salary Reduction (SAR-SEP)
plan maintained by your employer. To establish a Regular IRA as part of your
Employer's SEP plan, complete the IRA Application for a Regular IRA, indicating
in the proper box that the IRA is part of a SEP plan. A Roth IRA should not be
used in connection with a SEP plan.

What are the legal matters applicable to this Kit?
The Disclosure Statement in this Kit provides you with the basic information
that you should know about Investor Service Center Regular IRAs and Roth IRAs.
The Disclosure Statement provides general information about the governing rules
for these IRAs and the benefits and features offered through each type of IRA.
However, the Application and the Custodial Agreement are the primary documents
controlling the terms and conditions of your personal Investor Service Center
Regular or Roth IRA, and these shall govern in the case of any difference with
the Disclosure Statement.
Read carefully the applicable sections of the IRA Disclosure Statement
contained in this Kit, the Regular or Roth Individual Retirement Custodial
Account document (as applicable), the IRA Application, and the prospectus(es)
for any Fund(s) you are considering. Consult your lawyer or other tax adviser if
you have any questions about how opening a Regular IRA or Roth IRA will affect
your financial and tax situation. To establish more than one type of IRA, make a
copy of the enclosed IRA Application for each type of IRA you wish to open.
"You" or "your" when used throughout this Kit refer to the person for whom
the Investor Service Center Regular or Roth IRA is established. A "Roth IRA" is
either an Investor Service Center Roth IRA or any Roth IRA established by any
other financial institution. A "Regular IRA" is any non-Roth IRA offered by
Investor Service Center or any other financial institution.
The minimum investment to establish an Investor Service Center IRA or other
retirement plan is $1,000. Minimum subsequent investments are $100. The initial
investment minimums are waived if you elect to invest $100 or more each month in
the Fund through the Investor Service Center Automatic Investment Program - see
Part 3 of the IRA Application. There are no set up fees for any Investor Service
Center Retirement Plans. Subject to change on 30 days' notice, the plan
custodian charges Investor Service Center IRAs a $10 annual fiduciary fee, $10
for each distribution prior to age 59 1/2, and a $20 plan termination fee;
however, the annual fiduciary fee is waived if your IRA has assets of $10,000 or
more or if you invest regularly through the Investor Service Center Automatic
Investment Program.

More questions? Call toll-free 1-888-503-FUND(3863)

<PAGE>

How to Get Started

To complete the IRA Applications, please read the following. Questions? Please
call 1-888-503-FUND (3863) to speak to an Investor Service Center
Representative.

1. Print the registration information where requested in Part 1.

2. Check the circle in Part 2 to specify the fund investment and the type of
IRA you are opening.

o If making the initial investment with a contribution, enclose a check drawn to
the order of Investor Service Center in the amount of the contribution. Be sure
to indicate whether this is a contribution for last year or for the current
year. Third party checks cannot be accepted.

o If this is a Direct Transfer from another IRA custodian or trustee, check the
appropriate circle to indicate whether IRA assets were originally from a Regular
IRA to which you have made annual contributions, or originally from a Rollover
IRA that contains only assets from a qualified plan or 403(b) arrangement. Also,
complete and sign the IRA Transfer, Direct Rollover & Conversion form.

o If this is a Direct Rollover from an employer sponsored qualified plan or
403(b) arrangement, check the appropriate circle. Complete and sign the IRA
Transfer, Direct Rollover & Conversion Form.

o If applicable, check the circle for a 60-Day Rollover. A 60-Day Rollover is
one where your IRA assets with another custodian were wholly distributed to you
and within 60 days you are rolling the assets over to an Investor Service Center
IRA.

o For a Roth IRA, check the circle in Part 2 to specify the type of Roth IRA you
are opening and provide the requested information.

o If this is a Roth IRA to which you expect to make contributions each year,
enclose a check drawn to the order of Investor Service Center in the amount of
your first contribution. Third party checks cannot be accepted. Only annual
contributions may be accepted in a Roth Contribution IRA. Roth IRAs became
available only starting January 1, 1998, so you cannot make a contribution for
tax year 1997.

o If you are converting an existing Investor Service Center Regular IRA to a
Roth IRA, check the appropriate circle. Complete and attach the IRA Transfer,
Direct Rollover and Conversion form and indicate your current IRA account number
and how much you are converting. Conversion of an existing Regular IRA will
result in inclusion of taxable amounts in the existing Regular IRA on your
income tax return. Note: If a conversion, rollover or transfer from a Regular
IRA to a Roth IRA is being made, only amounts converted, rolled over or
transferred during the same tax year will be accepted in a single Roth IRA. A
separate Roth IRA must be established to hold such amounts from a different tax
year. Annual contributions may never be deposited in a Roth IRA holding such
converted, rolled over or transferred amounts.

o If you want to convert your existing Regular IRA with Investor Service Center
or with another custodian or trustee, check the appropriate circle. A rollover
or transfer from an existing Regular IRA to a Roth IRA means that the taxable
amount in the existing Regular IRA will be treated as additional income on your
income tax return.

o If you are making a Direct Transfer from another Roth IRA with a different
trustee or custodian or a 60-Day Rollover, check the appropriate circle. Put the
requested information where indicated.

o For an IRA that will be used to receive employer contributions under an
employer's simplified employee pension (or "SEP") plan or under a grandfathered
salary reduction SEP plan (or "SAR-SEP"), check the appropriate circle in Part
2.

3. To take advantage of regular monthly investing, complete Part 3.

4. In Part 4, indicate your Primary Beneficiary(ies) and Contingent
Beneficiary(ies). Spousal consent is required if a beneficiary is other than
your spouse.

5. Sign and date the IRA Application in Part 5 at the end. If the Depositor is a
minor under the laws of the Depositor's state of residence, a parent or guardian
must sign the Adoption Agreement. Until the Depositor reaches the age of
majority, the parent or guardian will exercise the powers and duties of the
Depositor. (If guardian, provide copy of letters of appointment.)

If you are transferring assets or rolling over from an existing IRA to this
IRA, or converting a Regular IRA to a Roth IRA, please be sure to complete and
attach the IRA Transfer, Direct Rollover & Conversion form.

Send your completed forms and checks to: Investor Service Center, Inc., P.O. Box
419789, Kansas City MO 64141-6789

<PAGE>

IRA APPLICATION

Use this IRA Application to open a new IRA, Rollover IRA, Roth IRA, Roth
Conversion IRA, SEP IRA, and/or SAR-SEP IRA. To open a SIMPLE IRA or Education
IRA, call 1-888-503-FUND (3863). To establish more than one type of IRA, make a
copy of this IRA Application for each type of IRA you wish to open. Return the
completed IRA Application(s) in the enclosed envelope or mail to: Investor
Service Center, Box 419789, Kansas City, MO 64141-6789.

1. Registration If you need assistance in completing this IRA Application,
please call 1-888-503-FUND (3863).

First Name Middle Initial Last Name Social Security Number (required)

Mailing Address (Street and Apartment Number or Box Number)

City and State Zip

Birth Date (Month, Day, Year)

Home Telephone Number Work Telephone Number E-mail Address

Legal Residential Address (if different from Mailing Address)

City and State Zip

2. Initial Investment ($1,000 Minimum) Note: Minimums are waived for
participants in the Investor
Service Center Bank Transfer Plan (see Section 3). If you are transferring or
converting an existing IRA, please enclose the "Authorization for IRA Transfer,
Direct Rollover & Conversion" form.

Check the Fund you are investing in.
o Midas Fund
o Rockwood Fund
o Bull & Bear Dollar Reserves
o Bull & Bear Special Equities Fund
o Bull & Bear U.S. and Overseas Fund
o Bull & Bear Gold Investors
- ---------------------------------------------------------------
Regular IRA

o Deductible or non-deductible contribution for tax year 199( )
o Direct Transfer* from an existing o Regular IRA o Rollover IRA**
o Direct Rollover from an employer-sponsored plan*
o 60-Day Rollover from an existing o Regular IRA o Rollover IRA**
Amount: $
- ---------------------------------------------------------------
Roth Contribution IRA (Only annual contributions may be accepted in a Roth
Contribution IRA.)

o Non-deductible contribution for tax year 199( )
o Direct Transfer from Roth Contribution IRA, established on _____________*
o 60-Day Rollover from Roth Contribution IRA, established on _____________
Amount: $
- ---------------------------------------------------------------
Roth Conversion IRA

o Convert my existing Investor Service Center Regular IRA to a Roth
Conversion IRA*
o Convert my existing Regular IRA with another custodian to an Investor
Service Center Roth Conversion IRA*
o Direct Transfer from existing Roth Conversion IRA, established on __________*
o 60-Day Rollover from existing Roth Conversion IRA, established on __________
Amount: $
- ---------------------------------------------------------------
SEP IRA

o SEP Employer (or self employed) contribution
o Direct Transfer from existing SEP IRA*
o 60-Day Rollover from a SEP IRA Amount: $
- ---------------------------------------------------------------
SAR-SEP IRA plan established before 1997

o SEP Employee Salary Reduction
o Direct Transfer from existing SAR-SEP IRA*
o 60-Day Rollover from a SAR-SEP IRA Amount: $

* Complete and enclose IRA Transfer, Direct Rollover & Conversion Form.
** A Rollover IRA is an IRA originally set up with a distribution from an
employer-sponsored program.
<PAGE>

3. Investor Service Center Bank Transfer Plan Lets you automatically purchase
shares of the Investor Service Center mutual fund you specify each month by
transferring the dollar amount you specify from your bank account. Please attach
a voided check to this IRA Application showing the bank name, address, and
account number.

From my bank account, please invest automatically on the t10th t15th t20th day
of each month the following amount into my Investor Service Center IRA.
Amount: $
- ----------------------------------------------------------------------
Fund Name* $100 Minimum
*If no Investor Service Center mutual fund is specified, the investment will be
made in the money market fund, Bull & Bear Dollar Reserves.

4. IRA Beneficiary Designation "I hereby designate each person named below as a
beneficiary
of my IRA in the manner set forth below." If designating beneficiaries other
than a spouse please obtain the spouse's consent. "I consent to (1) the naming
of another person as primary beneficiary to receive more than half of this IRA's
assets, and/or (2) the naming of myself as primary beneficiary and others as
contingent beneficiaries. I give any interest in these assets to my spouse, to
the extent necessary to accomplish each beneficiary designation made below."

- ------------------------------------------------------------------
Spouse's Signature Date

Primary Beneficiary(ies):
First Name Middle Initial Last Name Share %* Birth Date (Month, Day, Year)

Relationship

First Name Middle Initial Last Name Share %* Birth Date (Month, Day, Year)

Relationship

*Shares for all primary beneficiaries combined must add up to 100%. Please do
not indicate fractional percentages. "If more than one person is named and no
percentages are indicated, payment shall be made in equal shares to my primary
beneficiary(ies) who survive me. If a percentage is indicated and a primary
beneficiary does not survive me, the percentage of that beneficiary's
designated share shall be divided equally among the surviving primary
beneficiary(ies). If no primary beneficiary is living at the time of my death, I
hereby specify that the balance be distributed in the same manner to my
contingent beneficiary(ies) listed below."

Contingent Beneficiary(ies):

First Name Middle Initial Last Name Share %* Birth Date (Month, Day, Year)

Relationship

First Name Middle Initial Last Name Share %* Birth Date (Month, Day, Year)

Relationship

*Shares for all contingent beneficiaries combined must add up to 100%. Please do
not indicate fractional percentages. Note: If beneficiary is a trust, please
indicate the trust's name and address, the date of the trust, and the name(s)
of the trustee(s). "I understand that if I choose not to designate any
beneficiary, my beneficiary will be my estate. I am aware that this beneficiary
designation will remain in effect until I deliver to Investor Service Center
another beneficiary designation with a later date."

<PAGE>

5. Signature Please sign and date below.

" I hereby adopt the Investor Service Center IRA Custodial Agreement and
Disclosure Statement as may be amended from time to time (the Investor Service
Center IRA") and hereby appoint the Custodian named therein, as may be
designated or redesignated from time to time (the "Custodian"). I have received
and read the prospectus(es) of the Fund(s) in which I am investing and the
Investor Service Center IRA Agreement. I agree that none of the Custodian,
Investor Service Center, Inc. ("ISC") nor the Fund(s) will be liable for acting
in good faith upon instructions it receives and believes genuine under
reasonable procedures designed to prevent unauthorized transactions. I
understand all telephone conversations with ISC representatives are recorded and
hereby consent to such recording. If I am opening this IRA with a distribution
from an employer-sponsored retirement plan, I certify that such distribution
qualifies for rollover treatment and irrevocably elect to treat it as a Rollover
contribution. I understand the annual IRA fiduciary fee of $10, pre-age 591/2
distribution fee of $10, and plan termination fee of $20 per IRA may be
separately billed or collected by redeeming sufficient shares from my account.
ISC or the Custodian may change this fee schedule from time to time, as provided
in the Investor Service Center IRA. By signing below, I hereby consent to the
terms of the Investor Service Center IRA and to the beneficiary(ies) I have
designated above."

My Signature (If a minor, parent or guardian must sign) Date

THANK YOU FOR INVESTING WITH INVESTOR SERVICE CENTER!
Investors Fiduciary Trust Company will accept appointment as Custodian of the
Depositor's Account, which becomes binding upon the Custodian when the Depositor
receives a confirmation of the purchase of the Fund shares indicated above. The
confirmation also will serve as notification of Investors Fiduciary Trust
Company's acceptance of appointment as Custodian of the Depositor's Account.

Investors Fiduciary Trust Company, Custodian
Signature

<PAGE>

IRA TRANSFER, DIRECT ROLLOVER & CONVERSION FORM

Use this form to transfer an IRA with another custodian to Investor Service
Center, to make a direct rollover from a qualified retirement plan or 403(b) to
an Investor Service Center IRA, or to convert a Regular IRA to an Investor
Service Center Roth IRA. Make sure you attach a copy of your existing IRA
account statement and an Investor Service Center IRA Application and/or
Authorization to Add an IRA form if you do not have an existing Investor Service
Center IRA of the type necessary to receive the assets. Return this completed
Form in the enclosed envelope or mail to: Investor Service Center, Box 419789,
Kansas City, MO 64141-6789.

1. Registration If you need assistance in completing this Form, please call
1-888-503-FUND (3863).

First Name Middle Initial Last Name

Mailing Address (Street and Apartment Number or Box Number)
City and State Zip

Social Security Number (required) Birth Date (Month, Day, Year)

Home Telephone Number Work Telephone Number

2. Tell Us About Your Existing IRA Please attach a recent IRA account statement
or provide the
information requested below. If you do not have an existing Investor Service
Center IRA of the type receiving the IRA assets, please also attach an Investor
Service Center IRA Application and/or Authorization to Add an IRA.

Type of Account: o Regular IRA o Rollover IRA (if transferring funds originally
in an employer-sponsored plan)
o Roth Contribution IRA o Roth Conversion IRA o SEP-IRA
o SAR-SEP IRA(for plans established prior to 1997)

Where It Is Currently Located:

Name of Current Custodian

Address of Current Custodian City and State Zip

Name and Telephone Number of Current Custodian or Service Organization

How It Is Currently Invested:

Mutual Fund or Bank Name Account Number

CD Date of Maturity (Month, Day, Year)+ Other(Specify)

+ If you liquidate a CD prior to maturity, you may incur a penalty. Send us this
IRA Transfer Form at least three weeks prior to the CD's maturity.
If your CD matures in less than three weeks, call 1-888-503-FUND (3863) for
procedures.

3. Tell Us How to Invest Your Transfer Proceeds Please check one of the
following:
o I am opening a new Investor Service Center IRA. Attached is my completed IRA
Application and/or Authorization to Add an IRA.
o I already have an Investor Service Center IRA of the type necessary to
receive the assets:

Investor Service Center IRA Account Number

Important Note: If Rollover and Regular IRA assets are combined in the same
account you will forfeit the right to roll over your Rollover IRA to another
qualified plan in the future, which may have tax implications.
<PAGE>

4. Authorization to Transfer Your IRA to Investor Service Center

Please transfer-in-kind or withdraw assets from my existing account in the
following manner:

A) o Liquidate o all o part $ ________________ of the account listed in Section
2 and transfer any proceeds to my Investor Service Center IRA o immediately
o at maturity.

B) o Transfer-in-kind my Investor Service Center Fund shares held in the account
listed in Section 2 above to my Investor Service Center IRA.

I have received and read the prospectus for the Fund(s) in which I am
investing. If I am over 701/2, I attest that none of the amount to be
transferred will include the required minimum distribution for the current year
pursuant to Section 401(a)(9) of the Internal Revenue Code. I certify to the
present IRA custodian or trustee that the undersigned has established a
successor Individual Retirement Custodial Account meeting the requirements of
Internal Revenue Code Section 408(a) or 408A (as the case may be) to which
assets will be transferred, and certifies to Investors Fiduciary Trust Company
that the IRA from which assets are being transferred meets the requirements of
Internal Revenue Code Section 408(a) or 408A (as the case may be).

Signature Date

SIGNATURE GUARANTEE (only if required by current custodian or trustee)

Name of Bank or Dealer Firm

Signature of Officer and Title

Investors Fiduciary Trust Company will accept appointment as Custodian of the
Depositor's Account, which becomes binding upon the Custodian when the Depositor
receives a confirmation of the purchase of the Fund shares indicated above. The
confirmation also will serve as notification of Investors Fiduciary Trust
Company's acceptance of appointment as Custodian of the Depositor's Account.

Investors Fiduciary Trust Company, Custodian
Signature

<PAGE>

AUTHORIZATION TO ADD AN IRA

If you already have one type of IRA with Investor Service Center, you can use
this form to open another type of IRA with Investor Service Center. For example,
if you already have a deductible-type Regular IRA with Investor Service Center,
use this form to establish a new Roth-type IRA with Investor Service Center. If
you want to establish more than one additional type, i.e., a Roth and a SEP-IRA,
make a copy of this form, and return one completed copy for each additional type
of IRA you wish to open. Return this completed Authorization in the enclosed
envelope or mail to: Investor Service Center, Box 419789, Kansas City, MO
64141-6789.

1. Request for an Additional IRA Do not use this form to open a SIMPLE IRA. To
open a SIMPLE IRA, for information on how to make future changes to your IRA, or
if you need assistance in completing this form, please call 1-888-503-FUND
(3863).

Please open an additional Individual Retirement Account (IRA) for which I
authorize the identical account, address, accountholder birthdate, social
security number, and beneficiary information as given for the existing account
listed below. I direct that the initial investment indicated below be made with
the same mutual fund(s) (and if more than one fund, in the same percentage
allocation) as is the IRA account number listed below, unless I have checked the
following box o, in which case 100% should be invested in the following mutual
fund: ______________.

Existing Account Information:

Existing IRA Account Number Social Security Number Day Telephone #
- ----------------------------------------------------------------------
2. Initial Investment ($1,000 Minimum) Note: Minimums are waived for
participants in the Investor
Service Center Bank Transfer Plan (see Section 3). If you are transferring or
converting an existing IRA, please enclose the "Authorization for IRA Transfer,
Direct Rollover & Conversion" form.
- --------------------------------------------
Regular IRA

o Deductible or non-deductible contribution for tax year 199( )
o Direct Transfer* from an existing o Regular IRA o Rollover IRA**
o Direct Rollover from an employer-sponsored plan*
o 60-Day Rollover from an existing o Regular IRA o Rollover IRA**
Amount: $
- --------------------------------------------
Roth Contribution IRA (Only annual contributions may be accepted in a Roth
Contribution IRA.)

o Non-deductible contribution for tax year 199( )
o Direct Transfer from Roth Contribution IRA, established on ____________*
o 60-Day Rollover from Roth Contribution IRA, established on ______________
Amount: $
- ---------------------------------------------
Roth Conversion IRA

o Convert my existing Investor Service Center Regular IRA
to a Roth Conversion IRA*
o Convert my existing Regular IRA with another custodian to an Investor
Service Center Roth Conversion IRA*
o Direct Transfer from existing Roth Conversion IRA, established on___________*
o 60-Day Rollover from existing Roth Conversion IRA, established on__________
Amount: $
- ----------------------------------------------
SEP IRA

oSEP Employee Salary Reduction
o Direct Transfer from existing SAR-SEP IRA*
o 60-Day Rollover from a SAR-SEP IRA Amount: $
- -----------------------------------------------
* Complete and enclose IRA Transfer, Direct Rollover & Conversion Form.
** A Rollover IRA is an IRA originally set up with a distribution from an
employer-sponsored program.
<PAGE>

From my bank account, please invest automatically on the o10th o15th o20th day
of each month the following amount into my Investor Service Center IRA.
Amount: $
- -----------------------------------------------------------------
Fund Name* $100 Minimum

*If no Investor Service Center mutual fund is specified, the investment will be
made in the money market fund, Bull & Bear Dollar Reserves.

4. Signature Please sign and date below.

" I hereby adopt the Investor Service Center IRA Custodial Agreement and
Disclosure Statement as may be amended from time to time (the "Investor Service
Center IRA") and hereby appoint the Custodian named therein, as may be
designated or redesignated from time to time (the "Custodian"). I have received
and read the prospectus(es) of the Fund(s) in which I am investing and the
Investor Service Center IRA Agreement. I agree that none of the Custodian,
Investor Service Center, Inc. ("ISC") nor the Fund(s) will be liable for acting
in good faith upon instructions it receives and believes genuine under
reasonable procedures designed to prevent unauthorized transactions. I
understand all telephone conversations with ISC representatives are recorded and
hereby consent to such recording. If I am opening this IRA with a distribution
from an employer-sponsored retirement plan, I certify that such distribution
qualifies for rollover treatment and irrevocably elect to treat it as a Rollover
contribution. I understand the annual IRA fiduciary fee of $10, pre-age 591/2
distribution fee of $10, and plan termination fee of $20 per IRA may be
separately billed or collected by redeeming sufficient shares from my account.
ISC or the Custodian may change this fee schedule from time to time, as provided
in the Investor Service Center IRA. By signing below, I hereby consent to the
terms of the Investor Service Center IRA and to the beneficiary(ies) I have
designated above."
- ----------------------------------------------------
My Signature Date

If the Depositor is a minor under the laws of the Depositor's state of
residence, a parent or guardian must sign the Adoption Agreement. Until the
Depositor reaches the age of majority, the parent or guardian will exercise the
powers and duties of the Depositor. (If guardian, provide copy of letters of
appointment )

Signature of Parent or Guardian Date

Investors Fiduciary Trust Company, Custodian
Signature

<PAGE>

Disclosure Statement

Part One: Description of Regular IRAs

INTRODUCTION

Part One of the Disclosure Statement describes the rules applicable to
Regular IRAs beginning January 1, 1998. IRAs described in these pages are called
"Regular IRAs" to distinguish them from the new "Roth IRAs" first available
starting in 1998. Roth IRAs are described in Part Two of this Disclosure
Statement.
For Regular IRA contributions for 1997 (including contributions made up to
April 15, 1998 but designated as contributions for 1997), there are different
rules for determining the deductibility of your contribution on your federal tax
return. For contributions for 1997, the "active participant" limits on
deductibility (described below) apply if either spouse is an active participant
in an employer-sponsored plan. Also, the adjusted gross income ("AGI") levels
for partially deductible or nondeductible Regular IRA contributions (described
below) are lower for 1997 ($25,000 for single taxpayers, with no deduction if
your AGI is above $35,000; $40,000 for married taxpayers filing jointly, with no
deduction if your AGI is above $50,000). Also, the exceptions to the 10% early
withdrawal penalty for withdrawals to pay certain higher education or first-time
homebuyer expenses do not apply to withdrawals in 1997.
This Part One of the Disclosure Statement describes Regular IRAs. It does
not describe Roth IRAs, a new type of IRA available starting in 1998.
Contributions to a Roth IRA are not deductible (regardless of your AGI), but
withdrawals that meet certain requirements are not subject to federal income
tax, so that dividends and investment growth on amounts held in the Roth IRA can
escape federal income tax. Please see Part Two of this Disclosure Statement to
learn more about Roth IRAs.
Regular IRAs described in this Disclosure Statement may be used as part of
a simplified employee pension (SEP) plan maintained by your employer. Under a
SEP your employer may make contributions to your Regular IRA, and these
contributions may exceed the normal limits on Regular IRA contributions. This
Disclosure Statement does not describe IRAs established in connection with a
SIMPLE IRA program maintained by your employer. Employers provide special
explanatory materials for accounts established as part of a SIMPLE IRA program.
Regular IRAs may be used in connection with a SIMPLE IRA program, but for the
first two years of participation a special SIMPLE IRA (not a Regular IRA) is
required.

YOUR REGULAR IRA

This Part One contains information about your Regular Individual Retirement
Custodial Account with Investor Service Center. A Regular IRA gives you several
tax benefits. Earnings on the assets held in your Regular IRA are not subject to
federal income tax until withdrawn by you. You may be able to deduct all or part
of your Regular IRA contribution on your federal income tax return. State income
tax treatment of your Regular IRA may differ from federal treatment; ask your
state tax department or your personal tax advisor for details.
Be sure to read Part Three of this Disclosure Statement for important
additional information, including information on how to revoke your Regular IRA,
investments and prohibited transactions, fees and expenses, and certain tax
requirements.

ELIGIBILITY

What are the eligibility requirements for a Regular IRA?
You are eligible to establish and contribute to a Regular IRA for a year if:

o You received compensation (or earned income if you are self employed) during
the year for personal services you rendered. If you received taxable alimony,
this is treated like compensation for IRA purposes.
o You did not reach age 70 1/2 during the year.

Can I contribute to a Regular IRA for my Spouse?
For each year before the year when your spouse attains age 70 1/2, you can
contribute to a separate Regular IRA for your spouse, regardless of whether your
spouse had any compensation or earned income in that year. This is called a
"spousal IRA." To make a contribution to a Regular IRA for your spouse, you must
file a joint tax return for the year with your spouse. For a spousal IRA, your
spouse must set up a different Regular IRA, separate from yours, to which you
contribute.

CONTRIBUTIONS

When can I make contributions to a Regular IRA?
You may make a contribution to your existing Regular IRA or establish a new
Regular IRA for a taxable year by the due date (not including any extensions)
for your federal income tax return for the year. Usually this is April 15 of the
following year.

How much can I contribute to my Regular IRA?
For each year when you are eligible (see above), you can contribute up to
the lesser of $2,000 or 100% of your compensation (or earned income, if you are
self-employed). However, under the tax laws, all or a portion of your
contribution may not be deductible.
If you and your spouse have spousal Regular IRAs, each spouse may
contribute up to $2,000 to his or her IRA for a year as long as the combined
compensation of both spouses for the year (as shown on your joint income tax
return) is at least $4,000. If the combined compensation of both spouses is less
than $4,000, the spouse with the higher amount of compensation may contribute up
to that spouse's compensation amount, or $2,000 if less. The spouse with the
lower compensation amount may contribute any amount up to that spouse's
compensation plus any excess of the other spouse's compensation over the other
spouse's IRA contribution. However, the maximum contribution to either spouse's
Regular IRA is $2,000 for the year.

<PAGE>

If you (or your spouse) establish a new Roth IRA and make contributions to
both your Regular IRA and a Roth IRA, the combined limit on contributions to
both your (or your spouse's) Regular IRA and Roth IRA for a single calendar year
is $2,000.

How do I know if my contribution is tax deductible?
The deductibility of your contribution depends upon whether you are an
active participant in any employer-sponsored retirement plan. If you are not an
active participant, the entire contribution to your Regular IRA is deductible.
If you are an active participant in an employer-sponsored plan, your
Regular IRA contribution may still be completely or partly deductible on your
tax return. This depends on the amount of your income (see below). Similarly,
the deductibility of a contribution to a Regular IRA for your spouse depends
upon whether your spouse is an active participant in any employer-sponsored
retirement plan. If your spouse is not an active participant, the contribution
to your spouse's Regular IRA will be deductible. If your spouse is an active
participant, the Regular IRA contribution will be completely, partly or not
deductible depending upon your combined income.
An exception to the preceding rules applies to high-income married
taxpayers, where one spouse is an active participant in an employer-sponsored
retirement plan and the other spouse is not. A contribution to the non-active
participant spouse's Regular IRA will be only partly deductible at an adjusted
gross income level on the joint tax return of $150,000, and the deductibility
will be phased out as described below over the next $10,000 so that there will
be no deduction at all with an adjusted gross income level of $160,000 or
higher.

How do I determine my or my spouse's "active participant" status?
Your (or your spouse's) Form W-2 should indicate if you (or your spouse)
were an active participant in an employer-sponsored retirement plan for a year.
If you have a question, you should ask your employer or the plan administrator.
In addition, regardless of income level, your spouse's "active participant"
status will not affect the deductibility of your contributions to your Regular
IRA if you and your spouse file separate tax returns for the taxable year and
you lived apart at all times during the taxable year.

What are the deduction restrictions for active participants?
If you (or your spouse) are an active participant in an employer plan
during a year, the contribution to your Regular IRA (or your spouse's Regular
IRA) may be completely, partly or not deductible depending upon your filing
status and your amount of adjusted gross income ("AGI"). If AGI is any amount up
to the lower limit, the contribution is deductible. If your AGI falls between
the lower limit and the upper limit, the contribution is partly deductible. If
your AGI falls above the upper limit, the contribution is not deductible.

FOR ACTIVE PARTICIPANTS - 1998

If You Are Single If You Are Married Then Your Regular IRA
Filing Jointly Contribution Is
- ------------------ ------------------ ---------------------
Up to Lower Limit Up toLower Limit Fully Deductible
($30,000 for 1998) ($50,000 for 1998)

More than Lower Limit More than Lower Limit Partly Deductible
but less than but less than
Upper Limit ($40,000 Upper Limit ($60,000
for 1998) for 1998)

Upper Limit or more Upper Limit or more Not Deductible

TABLE OF FUTURE LOWER AND UPPER LIMITS

The Lower Limit and the Upper Limit will change for 1999 and later years, as
shown in the following table. Substitute the correct Lower Limit and Upper Limit
in the table above to determine deductibility in any particular year. (Note: if
you are married but filing separate returns, your Lower Limit is always zero and
your Upper Limit is always $10,000).

YEAR SINGLE MARRIED FILING JOINTLY
- ----- -------------------------- ---------------------------
Lower Limit Upper Limit Lower Limit Upper Limit

1999 $31,000 $41,000 $51,000 $61,000
2000 $32,000 $42,000 $52,000 $62,000
2001 $33,000 $43,000 $53,000 $63,000
2002 $34,000 $44,000 $54,000 $64,000
2003 $40,000 $50,000 $60,000 $70,000
2004 $45,000 $55,000 $65,000 $75,000
2005 $50,000 $60,000 $70,000 $80,000
2006 $50,000 $60,000 $75,000 $85,000
2007 and later $50,000 $60,000 $80,000 $100,000

<PAGE>

How do I calculate my deduction if I fall in the "partly deductible" range?
If your AGI falls in the partly deductible range, you must calculate the
portion of your contribution that is deductible. To do this, multiply your
contribution by a fraction. The numerator is the amount by which your AGI
exceeds the lower limit (for 1998: $30,000 if single, or $50,000 if married
filing jointly). The denominator is $10,000 (note that the denominator for
married joint filers is $20,000 starting in 2007). Subtract this from your
contribution and then round down to the nearest $10. The deductible amount is
the greater of the amount calculated or $200 (provided you contributed at least
$200). If your contribution was less than $200, then the entire contribution is
deductible.
For example, assume that you make a $2,000 contribution to your Regular IRA
in 1998, a year in which you are an active participant in your employer's
retirement plan. Also assume that your AGI is $57,555 and you are married,
filing jointly. You would calculate the deductible portion of your contribution
this way:

1. The amount by which your AGI exceeds the lower limit of the partly
deductible range: ($57,555 _ $50,000) = $7,555

2. Divide this by $10,000: $7,555 = 0.7555
$10,000

3. Multiply this by your contribution limit:

0.7555 x $2,000 = $1,511

4. Subtract this from your contribution:

$2,000 - $1,551 = $489

5. Round this down to the nearest $10: $489 ----- $480

6. Your deductible contribution is the greater of this amount, $480, or $200

Even though part or all of your contribution is not deductible, you may
still contribute to your Regular IRA (and your spouse may contribute to your
spouse's Regular IRA) up to the limit on contributions. When you file your tax
return for the year, you must designate the amount of non-deductible
contributions to your Regular IRA for the year. See IRS Form 8606.

What happens if I contribute more than allowed to my regular IRA?
The maximum contribution you can make to a Regular IRA generally is $2,000
or 100% of compensation or earned income, whichever is less. Any amount
contributed to the IRA above the maximum is considered an "excess contribution."
The excess is calculated using your contribution limit, not the deductible
limit. An excess contribution is subject to excise tax of 6% for each year it
remains in the IRA.

How can I correct an excess contribution?
Excess contributions may be corrected without paying a 6% penalty. To do
so, you must withdraw the excess and any earnings on the excess before the due
date (including extensions) for filing your federal income tax return for the
year for which you made the excess contribution. A deduction should not be taken
for any excess contribution. The earnings must be included in your income for
the tax year for which the contribution was made and may be subject to a 10%
premature withdrawal tax if you have not reached age 59 1/2.

What happens if I don't correct the excess contribution by the tax return due
date?
Any excess contribution not withdrawn by the tax return due date (including
any extensions) for the year for which the contribution was made will be subject
to the 6% excise tax. There will be an additional 6% excise tax for each
subsequent year the excess remains in your account.
Under limited circumstances, you may correct an excess contribution after
tax filing time by withdrawing the excess contribution (leaving the earnings in
the account). This withdrawal will not be includable in income nor will it be
subject to any premature withdrawal penalty if (1) your contributions to all
Regular IRAs do not exceed $2,000 and (2) you did not take a deduction for the
excess amount (or you file an amended return (Form 1040X) which removes the
excess deduction).

How are excess contributions treated if none of the preceding rules apply?
Unless an excess contribution qualifies for the special treatment outlined
above, the excess contribution and any earnings on it withdrawn after tax filing
time will be includable in taxable income and may be subject to a 10% premature
withdrawal penalty. No deduction will be allowed for the excess contribution
for the year in which it is made.
Excess contributions may be corrected in a subsequent year to the extent
that you contribute less than your maximum amount. As the prior excess
contribution is reduced or eliminated, the 6% excise tax will become
correspondingly reduced or eliminated for subsequent tax years. Also, you may be
able to take an income tax deduction for the amount of excess that was reduced
or eliminated, depending on whether you would be able to take a deduction if you
had instead contributed the same amount.
<PAGE>

Are the earnings on my regular IRA funds taxed?
Any dividends on or growth of the investments held in your Regular IRA are
generally exempt from federal income taxes and will not be taxed until withdrawn
by you, unless the tax exempt status of your Regular IRA is revoked (this is
described in Part Three of this Disclosure Statement).

TRANSFERS/ROLLOVERS

Can I transfer or roll over a distribution I receive from my employer's
retirement plan into a regular IRA?
Almost all distributions from employer plans or 403(b) arrangements (for
employees of tax-exempt employers) are eligible for transfer or rollover to a
Regular IRA. The main exceptions are

o payments over the lifetime or life expectancy of the participant (or
participant and a designated beneficiary),
o installment payments for a period of 10 years or more,
o required distributions (generally the rules require distributions starting
at age 70 1/2 or for certain employees starting at
retirement, if later), and
o payments of employee after-tax contributions.

If you are eligible to receive a distribution from a tax qualified
retirement plan as a result of, for example, termination of employment, plan
discontinuance, or retirement, all or part of the distribution may be
transferred directly into your Regular IRA. This is a called a "Direct
Rollover." Or, you may receive the distribution and make a regular rollover to
your Regular IRA within 60 days, called a "60-Day Rollover." By making a Direct
Rollover or a 60-Day Rollover, you can defer income taxes on the amount rolled
over until you subsequently make withdrawals from your IRA.
The maximum amount you may roll over is the amount of employer
contributions and earnings distributed. You may not roll over any after-tax
employee contributions you made to the employer retirement plan. If you are over
age 70 1/2 and are required to take minimum distributions under the tax laws,
you may not roll over any amount required to be distributed to you under the
minimum distribution rules. Also, if you are receiving periodic payments over
your or your and your designated beneficiary's life expectancy or for a period
of at least 10 years, you may not roll over these payments. A rollover to a
regular IRA must be completed within 60 days after the distribution from the
employer retirement plan to be valid.
A qualified plan administrator or 403(b) sponsor must withhold 20% of your
distribution for federal income taxes unless you elect a Direct Rollover. Your
plan or 403(b) sponsor is required to provide you with information about Direct
and 60-Day Rollovers and withholding taxes before you receive your distribution
and must comply with your directions to make a Direct Rollover.
The rules governing rollovers are complicated. Be sure to consult your tax
advisor or the IRS if you have a question about rollovers.

Once I have rolled over a plan distribution into a Regular IRA, can I
subsequently roll over into another employer's qualified retirement plan?
Yes. Part or all of an eligible distribution received from a qualified plan
may be transferred from the Regular IRA holding it to another qualified plan.
However, the IRA must have no assets other than those which were previously
distributed to you from the qualified plan. Specifically, the IRA cannot contain
any contributions by you (or your spouse). Also, the new qualified plan must
accept rollovers. Similar rules apply to Regular IRAs established with rollovers
from 403(b) arrangements.

Can I make a 60-Day Rollover from my Regular IRA to another Regular IRA?
You may make a rollover from one Regular IRA to another Regular IRA you
have or you establish to receive the rollover. Such a rollover must be completed
within 60 days after the withdrawal from your first Regular IRA. After making a
60-Day Rollover from one Regular IRA to another, you must wait a full year (365
days) before you can make another such rollover. (However, you can instruct a
Regular IRA custodian to transfer amounts directly to another Regular IRA
custodian; called a Direct Transfer, it does not count as a rollover.)

What happens if I combine rollover contributions with my normal contributions in
one IRA?
If you wish to make both a normal annual contribution and a rollover
contribution, you may wish to open two separate Regular IRAs by completing two
IRA Applications. You should consult a tax advisor before making your annual
contribution to the IRA you established with rollover contributions (or make a
rollover contribution to the IRA to which you make your annual contributions).
This is because combining your annual contributions and rollover contributions
originating from an employer plan distribution would prohibit the future
rollover out of the IRA into another qualified plan. If despite this, you still
wish to combine a rollover contribution and the IRA holding your annual
contributions, you should establish the account as a Regular IRA on the IRA
Application (not a Rollover IRA or Direct Rollover IRA) and make the
contributions to that account.

How do rollovers affect my contribution or deduction limits?
Rollover contributions, if properly made, do not count toward the maximum
contribution. Also, rollovers are not deductible and they do not affect your
deduction limits as described above.

What about converting my regular IRA to a Roth IRA?
The rules for converting a Regular IRA to a new Roth IRA, or making a
rollover from a Regular IRA to a new Roth IRA, are described in Part Two below.

WITHDRAWALS

When can I make withdrawals from my Regular IRA?
You may withdraw from your Regular IRA at any time. However, withdrawals
before age 59 1/2 may be subject to a 10% penalty tax in addition to regular
income taxes (see below).

When must I start making withdrawals?
If you have not withdrawn your entire IRA by the April 1 following the year
in which you reach 70 1/2, you must make minimum withdrawals in order to avoid
penalty taxes. The rule allowing certain employees to postpone distributions
from an employer qualified plan until actual retirement (even if this is after
age 70 1/2) does not apply to Regular IRAs.
The minimum withdrawal amount is determined by dividing the balance in your
Regular IRA (or IRAs) by your life expectancy or the combined life expectancy of
you and your designated beneficiary. The minimum withdrawal rules are complex.
Consult your tax advisor for assistance. The penalty tax is 50% of the
difference between the minimum withdrawal amount and your actual withdrawals
during a year. The IRS may waive or reduce the penalty tax if you can show that
your failure to make the required minimum withdrawals was due to reasonable
cause and you are taking reasonable steps to remedy the problem.

How are withdrawals from my Regular IRA taxed?
Amounts withdrawn by you are includable in your gross income in the taxable
year that you receive them, and are taxable as ordinary income. Lump sum
withdrawals from a Regular IRA are not eligible for averaging treatment
currently available to certain lump sum distributions from qualified employer
retirement plans.

<PAGE>

Since the purpose of a Regular IRA is to accumulate funds for retirement,
your receipt or use of any portion of your Regular IRA before you attain age 59
1/2 generally will be considered as an early withdrawal and subject to a 10%
penalty tax.

The 10% penalty tax for early withdrawal will not apply if:

o The distribution was a result of your death or disability.

o The purpose of the withdrawal is to pay certain higher education expenses for
yourself or your spouse, child, or grandchild. Qualifying expenses include
tuition, fees, books, supplies and equipment required for attendance at a
post-secondary educational institution. Room and board expenses may qualify if
the student is attending at least half-time.
o The withdrawal is used to pay
eligible first-time homebuyer expenses. These are the costs of purchasing,
building or rebuilding a principal residence (including customary settlement,
financing or closing costs). The purchaser may be you, your spouse, or a child,
grandchild, parent or grandparent of you or your spouse. An individual is
considered a "first-time homebuyer" if the individual (or the individual's
spouse, if married) did not have an ownership interest in a principal residence
during the two-year period immediately preceding the acquisition in question.
The withdrawal must be used for eligible expenses within 120 days after the
withdrawal. (If there is an unexpected delay, or cancellation of the home
acquisition, a withdrawal may be redeposited as a rollover). There is a lifetime
limit on eligible first-time homebuyer expenses of $10,000 per individual.

o The distribution is one of a scheduled series of substantially equal periodic
payments for your life or life expectancy (or the joint lives or life
expectancies of you and your beneficiary). If there is an adjustment to the
scheduled series of payments, the 10% penalty tax may apply. The 10% penalty
will not apply if you make no change in the series of payments until the end of
five years or until you reach age 59 1/2, whichever is later. If you make a
change before then, the penalty will apply. For example, if you begin receiving
payments at age 50 under a withdrawal program providing for substantially equal
payments over your life expectancy, and at age 58 you elect to receive the
remaining amount in your Regular IRA in a lump-sum, the 10% penalty tax will
apply to the lump sum and to the amounts previously paid to you before age 59
1/2.

o The distribution does not exceed the amount of your deductible medical
expenses for the year (generally speaking, medical expenses paid during a year
are deductible if they are greater than 7 1/2% of your adjusted gross income for
that year).

o The distribution does not exceed the amount you paid for health insurance
coverage for yourself, your spouse and dependents. This exception applies only
if you have been unemployed and received federal or state unemployment
compensation payments for at least 12 weeks; this exception applies to
distributions during the year in which you received the unemployment
compensation and during the following year, but not to any distributions
received after you have been reemployed for at least 60 days.

How are nondeductible contributions taxed when they are withdrawn?
A withdrawal of nondeductible contributions (not including earnings) will
be tax-free. However, if you made both deductible and nondeductible
contributions to your Regular IRA, then each distribution will be treated as
partly a return of your nondeductible contributions (not taxable) and partly a
distribution of deductible contributions and earnings (taxable). The nontaxable
amount is the portion of the amount withdrawn which bears the same ratio as your
total nondeductible Regular IRA contributions bear to the total balance of all
your Regular IRAs (including rollover IRAs and SEPs, but not including Roth
IRAs).
For example, assume that you made the following Regular IRA contributions:

Year Deductible Nondeductible
1995 $2,000
1996 $2,000
1997 $1,000 $1,000
1998 ______ $1,000
$5,000 $2,000
====== ======

In addition assume that your Regular IRA has total investment earnings
through 1998 of $1,000. During 1998 you withdraw $500. Your total account
balance as of 12/31/98 is $7,500 as shown below.

Deductible Contributions $5,000
Nondeductible Contributions $2,000
Earnings on IRA $1,000
Less 1998 Withdrawal $ 500
Total Account Balance as of 12/31/98 $7,500
======

To determine the nontaxable portion of your 1998 withdrawal, the total 1998
withdrawal ($500) must be multiplied by a fraction. The numerator of the
fraction is the total of all nondeductible contributions remaining in the
account before the 1998 withdrawal ($2,000). The denominator is the total
account balance as of 12-31-98 ($7,500) plus the 1998 withdrawal ($500) or
$8,000. The calculation is:

Total Remaining

Nondeductible Contributions $2,000
--------------------------- ------ X $500 = $125
Total Account Balance $8,000

Thus, $125 of the $500 withdrawal in 1998 will not be included in your
taxable income. The remaining $375 will be taxable for 1998. In addition, for
future calculations the remaining nondeductible contribution total will be
$2,000 minus $125, or $1,875.
A loss in your Regular IRA investment may be deductible. You should consult
your tax advisor for further details on the appropriate calculation for this
deduction if applicable.

Is there a penalty tax on certain large withdrawals or accumulations in my IRA?
Earlier tax laws imposed a "success" penalty equal to 15% of withdrawals
from all retirement accounts (including IRAs, 401(k) or other employer
retirement plans, 403(b) arrangements and others) in a year exceeding a
specified amount (initially $150,000 per year). Also, there was a 15% estate tax
penalty on excess accumulations remaining in IRAs and other tax-favored
arrangements upon your death. These 15% penalty taxes have been repealed.

Important: Please see Part Three below which contains important information
applicable to all Investor Service Center IRAs.

<PAGE>

Part Two: Description of Roth IRAs

INTRODUCTION

This Part Two of the Disclosure Statement describes the rules generally
applicable to Roth IRAs beginning January 1, 1998. Roth IRAs are a new kind
of IRA available for the first time in 1998. Contributions to a Roth IRA for
1997 are not permitted.
Contributions to a Roth IRA are not tax-deductible, but withdrawals that meet
certain requirements are not subject to federal income taxes. This makes the
dividends on and growth of the investments held in your Roth IRA tax-free for
federal income tax purposes if the requirements are met.
Regular IRAs, which have existed since 1975, are still available.
Contributions to a Regular IRA may be tax-deductible. Earnings and gains on
amounts while held in a Regular IRA are tax-deferred. Withdrawals are subject to
federal income tax (except for prior after-tax contributions which may be
recovered without additional federal income tax).
This Part Two does not describe Regular IRAs. If you wish to review
information about Regular IRAs, please see Part One of this Disclosure
Statement. Be sure to read Part Three of this Disclosure Statement for important
additional information, including information on how to revoke your Roth IRA,
investments and prohibited transactions, fees and expenses and certain tax
requirements. This Disclosure Statement also does not describe IRAs established
in connection with a SIMPLE IRA program or a Simplified Employee Pension (SEP)
plan maintained by your employer. Roth IRAs may not be used in connection with a
SIMPLE IRA program or a SEP plan.

YOUR ROTH IRA

Your Roth IRA gives you several tax benefits. While contributions to a Roth
IRA are not deductible, dividends on and growth of the assets held in your Roth
IRA are not subject to federal income tax. Withdrawals by you from your Roth IRA
are excluded from your income for federal income tax purposes if certain
requirements (described below) are met. State income tax treatment of your Roth
IRA may differ from federal treatment; ask your state tax department or your
personal tax advisor for details.

ELIGIBILITY

What are the eligibility requirements for a Roth IRA?
Starting with 1998, you are eligible to establish and contribute to a Roth
IRA for a year if you received compensation (or earned income if you are self
employed) during the year for personal services you rendered. If you received
taxable alimony, this is treated like compensation for IRA purposes. In contrast
to a Regular IRA, with a Roth IRA you may continue making contributions after
you reach age 70 1/2.

Can I contribute to a Roth IRA for my spouse?
Starting with 1998, if you meet the eligibility requirements you can not
only contribute to your own Roth IRA, but also to a separate Roth IRA for your
spouse out of your compensation or earned income, regardless of whether your
spouse had any compensation or earned income in that year. This is called a
"spousal Roth IRA." To make a contribution to a Roth IRA for your spouse, you
must file a joint tax return for the year with your spouse. For a spousal Roth
IRA, your spouse must set up a different Roth IRA, separate from yours, to which
you contribute.
Of course, if your spouse has compensation or earned income, your spouse can
establish his or her own Roth IRA and make contributions to it in accordance
with the rules and limits described in this Part Two of the Disclosure
Statement.

CONTRIBUTIONS

When can I make contributions to a Roth IRA?
You may make a contribution to your Roth IRA or establish a new Roth IRA for
a taxable year by the due date (not including any extensions) for your federal
income tax return for the year. Usually this is April 15 of the following year.
For example, you will have until April 15, 1999 to establish and make a
contribution to a Roth IRA for 1998.
Caution: Since Roth IRAs are available starting January 1, 1998, you may
not make a contribution by April 15, 1998 to a Roth IRA for 1997.

How much can I contribute to my Roth IRA?
For each year when you are eligible (see above), you can contribute up to
the lesser of $2,000 or 100% of your compensation (or earned income, if you are
self-employed). For taxpayers with high income levels, the contribution limits
may be reduced (see below).
Your Roth IRA limit is reduced by any contributions for the same year to a
Regular IRA. For example, assuming you have at least $2,000 in compensation or
earned income, if you contribute $500 to your Regular IRA for 1998, your maximum
Roth IRA contribution for 1998 will be $1,500.
If you and your spouse have spousal Roth IRAs, each spouse may contribute up
to $2,000 to his or her Roth IRA for a year as long as the combined compensation
of both spouses for the year (as shown on your joint income tax return) is at
least $4,000. If the combined compensation of both spouses is less than $4,000,
the spouse with the higher amount of compensation may contribute up to that
spouse's compensation amount, or $2,000 if less. The spouse with the lower
compensation amount may contribute any amount up to that spouse's compensation
plus any excess of the other spouse's compensation over the other spouse's Roth
IRA contribution. However, the maximum contribution to either spouse's Roth IRA
is $2,000 for the year.
The spousal Roth IRA limits are reduced by any contributions for the same
calendar year to a Regular IRA maintained by you or your spouse.
Annual contributions may be made only to a Roth IRA annual contribution
account which does not contain converted or transferred funds from a Regular
IRA.

Are contributions to a Roth IRA tax deductible?
Contributions to a Roth IRA are not deductible. This is a major difference
between Roth IRAs and Regular IRAs. Contributions to a Regular IRA may be
deductible on your federal income tax return depending on whether or not you are
an active participant in an employer-sponsored plan and on your income level.

Are the earnings on my Roth IRA assets taxed?
Any dividends on or growth of investments held in your Roth IRA are
generally exempt from federal income taxes and will not be taxed until withdrawn
by you, unless the tax exempt status of your Roth IRA is revoked. If the
withdrawal qualifies as a tax-free withdrawal (see below), amounts reflecting
earnings or growth of assets in your Roth IRA will not be subject to federal
income tax.

<PAGE>

Which is better, a Roth IRA or a Regular IRA?
This will depend upon your individual situation. A Roth IRA may be better if
you are an active participant in an employer-sponsored plan and your adjusted
gross income is too high to make a deductible IRA contribution (but not too high
to make a Roth IRA contribution). Also, the benefits of a Roth IRA vs. a Regular
IRA may depend upon a number of other factors including: your current income tax
bracket vs. your expected income tax bracket when you make withdrawals from your
IRA, whether you expect to be able to make nontaxable withdrawals from your Roth
IRA (see below), how long you expect to leave your contributions in the IRA, how
much you expect the IRA to earn in the meantime, and possible future tax law
changes.
Consult a qualified tax or financial advisor for assistance on this
question.

Are there any restrictions on contributions to my Roth IRA?
Taxpayers with very high income levels may not be able to contribute to a
Roth IRA at all, or their contribution may be limited to an amount less than
$2,000. This depends upon your filing status and the amount of your adjusted
gross income (AGI). The following table shows how the contribution limits are
restricted:

ROTH IRA CONTRIBUTION LIMITS

If you are a If you are Married
Single Taxpayer with Filing Jointly with Then you may make
Adjusted Gross Income (AGI) Adjusted Gross Income (AGI)
- --------------------------- --------------------------- -----------------

Up to $95,000 Up to $150,000 Full Contribution

More than $95,000 More than $150,000 Reduced Contribution
but less than but less than (see explanation
$110,000 $160,000 below)

$110,000 and up $160,000 and up Zero(no Contribution)

Note: If you are a married taxpayer filing separately, your maximum Roth IRA
contribution limit phases out over the first $15,000 of adjusted gross income.
If your AGI is $15,000 or more, you may not contribute to a Roth IRA for the
year. Pending legislation in Congress may reduce this number from $15,000 to
$10,000. Consult your tax advisor or the IRS for the latest developments.
- -------------------------------------------------------------------------
Explanation of "Reduced Contribution"
If your AGI falls in the reduced contribution range, you must calculate your
contribution limit. To do this, multiply your normal contribution limit ($2,000
or your compensation, if less) by a fraction. The numerator is the amount by
which your AGI exceeds the lower limit of the reduced contribution range
($95,000 if single, or $150,000 if married filing jointly). The denominator is
$15,000 (single taxpayers) or $10,000 (married filing jointly). Subtract this
from your normal limit and then round down to the nearest $10.
The contribution limit is the greater of the amount calculated or $200.
For example, assume that your AGI for the year is $157,555 and you are
married, filing jointly. You would calculate your Roth IRA contribution limit
this way:

1. The amount by which your AGI exceeds the lower limit of the reduced
contribution deductible range:

$157,555 - $150,000 = $7,555

2. Divide this by $10,000: $7,555
--------
$10,000 = 0.7555

3. Multiply this by $2,000 (or your compensation for the year, if less):

0.7555 x $2,000 = $1,511

4. Subtract this from your $2,000 limit:

$2,000 - $1,551 = $489

5. Round this down to the nearest $10 = $480

6. Your contribution limit is the greater of this amount or $200.

Remember, your Roth IRA contribution limit of $2,000 is reduced by any
contributions for the same year to a Regular IRA. If you fall in the reduced
contribution range, the reduction formula applies to the Roth IRA contribution
limit left after subtracting your contribution for the year to a Regular IRA.

How do I determine my AGI?
AGI is your gross income minus those deductions which are available to all
taxpayers even if they don't itemize. Instructions to calculate your AGI are
provided with your income tax Form 1040 or 1040A.
There are two additional rules when calculating AGI for purposes of Roth IRA
contribution limits. First, if you are making a deductible contribution for the
year to a Regular IRA, your AGI is reduced by the amount of the deduction.
Second, if you are converting a Regular IRA to a Roth IRA in a year (see below),
the amount includable in your income as a result of the conversion is not
considered AGI when computing your Roth IRA contribution limit for the year.
(Note: a bill pending in Congress might affect the first rule -- consult your
tax advisor or the IRS for the latest developments.)

What happens if I contribute more than allowed to my Roth IRA?
The maximum contribution you can make to a Roth IRA generally is $2,000 or
100% of compensation or earned income, whichever is less. As noted above, your
maximum is reduced by the amount of any contribution to a Regular IRA for the
same year and may be further reduced if you have high AGI. Any amount
contributed to the Roth IRA above the maximum is considered an "excess
contribution." An excess contribution is subject to excise tax of 6% for each
year it remains in the Roth IRA.
<PAGE>

How can I correct an excess contribution?
Excess contributions may be corrected without paying a 6% penalty. To do so,
you must withdraw the excess and any earnings on the excess before the due date
(including extensions) for filing your federal income tax return for the year
for which you made the excess contribution. The earnings must be included in
your income for the tax year for which the contribution was made and may be
subject to a 10% premature withdrawal tax if you have not reached age 59 1/2
(unless an exception to the 10% penalty tax applies).

What happens if I don't correct the excess contribution by the tax return due
date?
Any excess contribution not withdrawn by the tax return due date (including
any extensions) for the year for which the contribution was made will be subject
to the 6% excise tax. There will be an additional 6% excise tax for each
subsequent year the excess remains in your account.
For subsequent years, you may reduce the excess contributions in your
account by making a withdrawal equal to the excess. Earnings need not be
withdrawn. To the extent that no earnings are withdrawn, the withdrawal will not
be subject to income taxes or possible penalties for premature withdrawals
before age 59 1/2. Excess contributions may also be corrected in a subsequent
year to the extent that you contribute less than your Roth IRA contribution
limit for the subsequent year. As the prior excess contribution is reduced or
eliminated, the 6% excise tax will become correspondingly reduced or eliminated
for subsequent tax years.

CONVERSION OF EXISTING REGULAR IRA

Can I convert an existing Regular IRA into a Roth IRA?
Yes, starting in 1998 you can convert an existing Regular IRA into a Roth
IRA if you meet the adjusted gross income (AGI) limits described below.
Conversion may be accomplished either by establishing a Roth IRA and then
transferring the amount in your Regular IRA you wish to convert to the new Roth
IRA. Or, if you want to convert an existing Regular IRA with Investors Fiduciary
Trust Company as custodian to a Roth IRA, you may give us directions to convert.
You are eligible to convert a Regular IRA to a Roth IRA if, for the year of
the conversion, your AGI is $100,000 or less. The same limit applies to married
and single taxpayers, and the limit is not indexed to cost-of-living increases.
Married taxpayers are eligible to convert a Regular IRA to a Roth IRA only if
they file a joint income tax return; married taxpayers filing separately are not
eligible to convert. Note: No contributions other than Roth IRA conversion
contributions made during the same tax year may be deposited in a single Roth
IRA conversion account.
Caution: You should be extremely cautious in converting an existing IRA into
a Roth IRA early in a year if there is any possibility that your AGI for the
year will exceed $100,000. Although a bill pending in Congress would permit you
to transfer amounts back to your Regular IRA if your AGI exceeds $100,000, under
the current rules, if you have already converted during a year and you turn out
to have more than $100,000 of AGI, there may be adverse tax results for you.
Consult your tax advisor or the IRS for the latest developments.

What are the tax results from converting?
The taxable amount in your Regular IRA you convert to a Roth IRA will be
considered taxable income on your federal income tax return for the year of the
conversion. All amounts in a Regular IRA are taxable except for your prior
non-deductible contributions to the Regular IRA.
If you make the conversion during 1998, the taxable income is spread over
four years. In other words, you would include one quarter of the taxable amount
on your federal income tax return for 1998, 1999, 2000 and 2001.

Should I convert my Regular IRA to a Roth IRA?
Only you can answer this question, in consultation with your tax or
financial advisors. A number of factors, including the following, may be
relevant. Conversion may be advantageous if you expect to leave the converted
funds on deposit in your Roth IRA for at least five years and to be able to
withdraw the funds under circumstances that will not be taxable (see below). The
benefits of converting will also depend on whether you expect to be in the same
tax bracket when you withdraw from your Roth IRA as you are now. Also,
conversion is based upon an assumption that Congress will not change the tax
rules for withdrawals from Roth IRAs in the future, but this cannot be
guaranteed.

TRANSFERS/ROLLOVERS

Can I transfer or roll over a distribution I receive from my employer's
retirement plan into a Roth IRA?
Distributions from qualified employer-sponsored retirement plans or
403(b) arrangements (for employees of tax-exempt
employers) are not eligible for rollover or direct transfer to a Roth IRA.
However, in certain circumstances it may be possible to make a direct rollover
of an eligible distribution to a Regular IRA and then to convert the Regular IRA
to a Roth IRA (see above). Consult your tax or financial advisor for further
information on this possibility.

Can I make a rollover from my Roth IRA to another Roth IRA?
You may make a rollover from one Roth IRA to another Roth IRA you have or
you establish to receive the rollover. Such a rollover must be completed within
60 days after the withdrawal from your first Roth IRA. After making a rollover
from one Roth IRA to another, you must wait a full year (365 days) before you
can make another such rollover. (However, you can instruct a Roth IRA custodian
to transfer amounts directly to another Roth IRA custodian; such a direct
transfer does not count as a rollover.)

How do rollovers affect my Roth IRA contribution limits?
Rollover contributions, if properly made, do not count toward the maximum
contribution. Also, you may make a rollover from one Roth IRA to another even
during a year when you are not eligible to contribute to a Roth IRA (for
example, because your AGI for that year is too high).

WITHDRAWALS

When can I make withdrawals from my Roth IRA?
You may withdraw from your Roth IRA at any time. If the withdrawal meets the
requirements discussed below, it is tax-free. This means that you pay no federal
income tax even though the withdrawal includes earnings or gains on your
contributions while they were held in your Roth IRA.
<PAGE>

When must I start making withdrawals?
There are no rules on when you must start making withdrawals from your Roth
IRA or on minimum required withdrawal amounts for any particular year during
your lifetime. Unlike Regular IRAs, you are not required to start making
withdrawals from a Roth IRA by the April 1 following the year in which you reach
age 70 1/2.
After your death, there are IRS rules on the timing and amount of
distributions. In general, the amount in your Roth IRA must be distributed by
the end of the fifth year after your death. However, distributions to a
designated beneficiary that begin by the end of the year following the year of
your death and that are paid over the life expectancy of the beneficiary satisfy
the rules. Also, if your surviving spouse is your designated beneficiary, the
spouse may defer the start of distributions until you would have reached age 70
1/2 had you lived.

What are the requirements for a tax-free withdrawal?
To be tax-free, a withdrawal from your Roth IRA must meet two requirements.
First, the Roth IRA must have been open for 5 or more years before the
withdrawal. Second, at least one of the following conditions must be satisfied:

o You are age 59 1/2 or older when you make the withdrawal.
o The withdrawal is made by your beneficiary after you die.
o You are disabled (as defined in IRS rules) when you make the withdrawal.
o You are using the withdrawal to cover eligible first time homebuyer expenses.
These are the costs of purchasing, building or rebuilding a principal residence
(including customary settlement, financing or closing costs). The purchaser may
be you, your spouse or a child, grandchild, parent or grandparent of you
or your spouse. An individual is considered a "first-time homebuyer" if
the individual (or the
individual's spouse, if married) did not have an ownership interest in a
principal residence during the two-year period immediately preceding the
acquisition in question. The withdrawal must be used for eligible expenses
within 120 days after the withdrawal (if there is an unexpected delay, or
cancellation of the home acquisition, a withdrawal may be redeposited as a
rollover).

There is a lifetime limit on eligible first-time homebuyer expenses of
$10,000 per individual.
For a Roth IRA that you set up with amounts rolled over or converted from a
Regular IRA, the 5 year period begins with the year in which the conversion or
rollover was made. (Note: a bill pending in Congress might affect this rule --
consult your tax advisor or the IRS for the latest developments.) For a Roth IRA
that you started with a normal contribution, the 5 year period starts with the
year for which you make the initial normal contribution.

How Are withdrawals from my Roth IRA taxed if the tax-free requirements are not
met?
If the qualified withdrawal requirements are not met, a withdrawal
consisting of your own prior contribution amounts to your Roth IRA will not be
considered taxable income in the year you receive it, nor will the 10% penalty
apply. To the extent that the nonqualified withdrawal consists of dividends or
gains while your contributions were held in your Roth IRA, the withdrawal is
includable in your gross income in the taxable year you receive it, and may be
subject to the 10% withdrawal penalty. All amounts withdrawn from your Roth IRA
are considered withdrawals of your contributions until you have withdrawn the
entire amount you have contributed. After that, all amounts withdrawn are
considered taxable withdrawals of dividends and gains.
Note that, for purposes of determining what portion of any distribution is
includable in income, all of your Roth IRA accounts are considered as one single
account. Amounts withdrawn from any one Roth IRA account are deemed to be
withdrawn from contributions first. Since all your Roth IRAs are considered to
be one account for this purpose, withdrawals from Roth IRA accounts are not
considered to be from earnings or interest until an amount equal to all
contributions made to all of an individual's Roth IRA accounts is withdrawn. The
following example illustrates this:
A single individual contributes $1,000 a year to his Investor Service Center
Roth IRA account and $1,000 a year to a non-Investor Service Center Roth IRA
account over a period of ten years. At the end of 10 years, his account balances
are as follows:

Principal
Contributions Earnings
------------- --------
Investor Service
Center Roth IRA $10,000 $10,000

Non-Investor Service
Center Roth IRA $10,000 $10,000

Total $20,000 $20,000
======= =======

At the end of 10 years, this person has $40,000 in both Roth IRA accounts,
of which $20,000 represents his contributions (aggregated) and $20,000
represents his earnings (aggregated). This individual, who is 40, withdraws
$15,000 from his non-Investor Service Center Roth IRA (not a qualified
withdrawal). We look to the aggregate amount of all principal contributions in
this case $20,000 - to determine if the withdrawal is from contributions, and
thus non-taxable. In this example, there is no ($0) taxable income as a result
of this withdrawal because the $15,000 withdrawal is less than the total amount
of aggregated contributions ($20,000). If this individual then withdrew $15,000
from his Investor Service Center Roth IRA, $5,000 would not be taxable (the
remaining aggregate contributions) and $10,000 would be treated as taxable
income for the year of the withdrawal, subject to regular income taxes and the
10% premature withdrawal penalty (unless an exception applies).

<PAGE>

Note: If passed, a bill currently pending in Congress will change the rules
and the results discussed above. Under the proposed legislation, in general,
separate Roth IRAs established for annual contributions and conversions for
separate years are not aggregated as explained above to determine the tax on
withdrawals. See your tax advisor for more information and the latest
developments.
Taxable withdrawals of dividends and gains from a Roth IRA are treated as
ordinary income. Withdrawals of taxable amounts from
a Roth IRA are not eligible for averaging treatment currently available to
certain lump sum distributions from qualified employer-sponsored retirement
plans, nor are such withdrawals eligible for taxable gains tax treatment.
Your receipt of any taxable withdrawal from your Roth IRA before you attain
age 59 1/2 generally will be considered as an early withdrawal and subject to a
10% penalty tax.
The 10% penalty tax for early withdrawal will not apply if any of the
following exceptions applies:

o The withdrawal was a result of your death or disability.
o The withdrawal is one of a scheduled series of substantially equal periodic
payments for your life or life expectancy (or the joint lives or life
expectancies of you and your beneficiary).

If there is an adjustment to the scheduled series of payments, the 10%
penalty tax will apply. For example, if you begin receiving payments at age 50
under a withdrawal program providing for substantially equal payments over your
life expectancy, and at age 58 you elect to withdraw the remaining amount in
your Roth IRA in a lump-sum, the 10% penalty tax will apply to the lump sum and
to the amounts previously paid to you before age 59 1/2 to the extent they were
includable in your taxable income.

o The withdrawal is used to pay eligible higher education expenses. These are
expenses for tuition, fees, books, and supplies required to attend an
institution for post-secondary education. Room and board expenses are also
eligible for a student attending at least half-time. The student may be you,
your spouse, or your child or grandchild. However, expenses that are paid for
with a scholarship or other educational assistance payment are not eligible
expenses.

o The withdrawal is used to cover eligible first time homebuyer expenses (as
described above in the discussion of tax-free withdrawals).

o The withdrawal does not exceed the amount of your deductible medical expenses
for the year (generally speaking, medical expenses paid during a year are
deductible if they are greater than 7 1/2% of your adjusted gross income for
that year).

o The withdrawal does not exceed the amount you paid for health insurance
coverage for yourself, your spouse and dependents. This exception applies only
if you have been unemployed and received federal or state unemployment
compensation payments for at least 12 weeks; this exception applies to
distributions during the year in which you received the unemployment
compensation and during the following year, but not to any distributions
received after you have been reemployed for at least 60 days.

What about the 15 percent penalty tax?
The rule imposing a 15% penalty tax on very large withdrawals from
tax-favored arrangements (including IRAs, 403(b) arrangements and qualified
employer-sponsored plans), or on excess amounts remaining in such tax-favored
arrangements at your death, has been repealed. This 15% tax no longer applies.

Important: The discussion of the tax rules for Roth IRAs in this Disclosure
Statement is based upon the best available information. However, Roth IRAs are
new under the tax laws, and the IRS has not issued regulations or rulings on the
operation and tax treatment of Roth IRA accounts. Also, if enacted, legislation
now pending in Congress will change some of the rules. Therefore, you should
consult your tax advisor for the latest developments or for advice about how
maintaining a Roth IRA will affect your personal tax or financial situation.
Also, please see Part Three below which contains important information
applicable to all Investor Service Center IRAs.

Part Three: Rules for All IRAs (Regular and Roth)

GENERAL INFORMATION

What are the basic IRA requirements?
All IRAs must meet certain requirements. Contributions generally must be
made in cash (which may be paid by check.) The IRA trustee or custodian must be
a bank or other person who has been approved by the Secretary of the Treasury.
Your contributions may not be invested in life insurance or collectible or be
commingled with other property except in a common trust or investment fund. Your
interest in the account must be nonforfeitable at all times. You may obtain
further information on IRAs from any district office of the Internal Revenue
Service.

May I revoke my IRA?
You may revoke a newly established Regular or Roth IRA at any time within
seven days after the date on which you receive this Disclosure Statement. A
Regular or Roth IRA established more than seven days after the date of your
receipt of this Disclosure Statement may not be revoked.
To revoke your Regular or Roth IRA, mail or deliver a written notice of
revocation to the Custodian at the address which appears at the end of this
Disclosure Statement. Mailed notice will be deemed given on the date that it is
postmarked (or, if sent by certified or registered mail, on the date of
certification or registration). If you revoke your Regular or Roth IRA within
the seven-day period, you are entitled to a return of the entire amount you
originally contributed into your Regular or Roth IRA, without adjustment for
such items as sales charges, administrative expenses or fluctuations in market
value.

INVESTMENTS

How are my IRA contributions invested?
You control the investment and reinvestment of contributions to your Regular
or Roth IRA. Investments must be in one or more of the Fund(s) available from
time to time as listed in the IRA Application for your Regular or Roth IRA or in
an investment selection form provided with your IRA Application or from Investor
Service Center. You direct the investment of your IRA by giving your investment
instructions to Investor Service Center. Since you control the investment of
your Regular or Roth IRA, you are responsible for any losses; neither the
Custodian nor Investor Service Center has any responsibility for any loss or
diminution in value occasioned by your exercise of investment control.
Transactions for your Regular or Roth IRA will generally be at the applicable
public offering price or net asset value for shares of the Fund(s) involved next
established after Investor Service Center receives proper investment
instructions from you; consult the current prospectus for the Fund(s) involved
for additional information.
Before making any investment, read carefully the current prospectus for any
Fund you are considering as an investment for your Regular IRA or Roth IRA. The
prospectus will contain information about the Fund's investment objectives and
policies, as well as any minimum initial investment or minimum balance
requirements and any sales, redemption or other charges.
Because you control the selection of investments for your Regular or Roth
IRA and because mutual fund shares fluctuate in value, the growth in value of
your Regular or Roth IRA cannot be guaranteed or projected.
<PAGE>

Are there any restrictions on the use of my IRA assets?
The tax-exempt status of your Regular or Roth IRA will be revoked if you
engage in any of the prohibited transactions listed in Section 4975 of the tax
code. Upon such revocation, your Regular or Roth IRA is treated as distributing
its assets to you. The taxable portion of the amount in your IRA will be subject
to income tax (unless, in the case of a Roth IRA, the requirements for a
tax-free withdrawal are satisfied). Also, you may be subject to a 10% penalty
tax on the taxable amount as a premature withdrawal if you have not yet reached
the age of 59 1/2.
Any investment in a collectible (for example, rare stamps) by your Regular
or Roth IRA is treated as a withdrawal; the only exception involves certain
types of government-sponsored coins or certain types of precious metal bullion.

What is a prohibited transaction?
Generally, a prohibited transaction is any improper use of the assets in
your Regular or Roth IRA. Some examples of prohibited transactions are:

o Direct or indirect sale or exchange of property between you and your Regular
or Roth IRA.
o Transfer of any property from your Regular or Roth IRA to yourself or from
yourself to your Regular or Roth IRA.

Your Regular or Roth IRA could lose its tax exempt status if you use all or
part of your interest in your Regular or Roth IRA as security for a loan or
borrow any money from your Regular or Roth IRA. Any portion of your Regular or
Roth IRA used as security for a loan will be treated as a distribution in the
year in which the money is borrowed. This amount may be taxable and you may also
be subject to the 10% premature withdrawal penalty on the taxable amount.

FEES AND EXPENSES

The annual fiduciary fee charged by the Custodian for maintaining either a
Regular IRA or a Roth IRA is listed in the IRA Application. Fees may be paid by
you directly, or the Custodian may deduct them from your Regular or Roth IRA.
Fees may be changed upon 30 days written notice to you. The full annual
fiduciary fee will be charged for any calendar year during which you have a
Regular or Roth IRA with Investor Service Center. This fee is not prorated for
periods of less than one full year. If provided for in this Disclosure Statement
or the IRA Application, termination fees are charged when your account is closed
whether the assets are distributed to you or transferred to a successor
custodian or trustee. The Custodian may charge you for its reasonable expenses
for services not covered by its fee schedule.There may be sales or other charges
associated with the purchase or redemption of shares of a Fund in which your
Regular IRA or Roth IRA is invested. Before investing, be sure to read carefully
the current prospectus of any Fund you are considering as an investment for your
Regular IRA or Roth IRA for a description of applicable charges.

TAX MATTERS

What IRA reports does the Custodian issue?
The Custodian will report all withdrawals to the IRS and the recipient on
the appropriate form. For reporting purposes, a direct transfer of assets to a
successor custodian or trustee is not considered a withdrawal.
The Custodian will report to the IRS the year-end value of your account and
the amount of any rollover (including conversions of a Regular IRA to a Roth
IRA) or regular contribution made during a calendar year, as well as the tax
year for which a contribution is made. Unless the Custodian receives an
indication from you to the contrary, it will treat any amount as a contribution
for the tax year in which it is received. It is most important that a
contribution between January and April 15th for the prior year be clearly
designated as such.

What tax information must I report to the IRS?
You must file Form 5329 with the IRS for each taxable year for which you
made an excess contribution or you take a premature withdrawal that is subject
to the 10% penalty tax, or you withdraw less than the minimum amount required
from your Regular IRA. If your beneficiary fails to make required minimum
withdrawals from your Regular or Roth IRA after your death, your beneficiary may
be subject to an excise tax and be required to file Form 5329.
For Regular IRAs, you must also report each nondeductible contribution to
the IRS by designating it a nondeductible contribution on your tax return. Use
Form 8606. In addition, for any year in which you make a nondeductible
contribution or take a withdrawal, you must include additional information on
your tax return. The information required includes: (1) the amount of your
nondeductible contributions for that year; (2) the amount of withdrawals from
Regular IRAs in that year; (3) the amount by which your total nondeductible
contributions for all the years exceed the total amount of your distributions
previously excluded from gross income; and (4) the total value of all your
Regular IRAs as of the end of the year. If you fail to report any of this
information, the IRS will assume that all your contributions were deductible.
This will result in the taxation of the portion of your withdrawals that should
be treated as a nontaxable return of your nondeductible contributions.

Which withdrawals are subject to withholding?

Roth IRA
Federal income tax will be withheld at a flat rate of 10% of any taxable
withdrawal from your Roth IRA, unless you elect not to have tax withheld.
Withdrawals from a Roth IRA are not subject to the mandatory 20% income tax
withholding that applies to most distributions from qualified plans or 403(b)
accounts that are not directly rolled over to another plan or IRA.

Regular IRA
Federal income tax will be withheld at a flat rate of 10% from any
withdrawal from your Regular IRA, unless you elect not to have tax withheld.
Withdrawals from a Regular IRA are not subject to the mandatory 20% income tax
withholding that applies to most distributions from qualified plans or 403(b)
accounts that are not directly rolled over to another plan or IRA.

<PAGE>

ACCOUNT TERMINATION

You may terminate your Regular IRA or Roth IRA at any time after its
establishment by sending a completed withdrawal form (or other withdrawal
instructions in a form acceptable to the Custodian), or a transfer authorization
form, to: Investor Service Center, P.O.
Box 418789, Kansas City, MO 64141-6789.

Your Regular IRA or Roth IRA with Investor Service Center will terminate
upon the first to occur of the following:

o The date your properly executed withdrawal form or instructions (as described
above) withdrawing your total Regular IRA or Roth IRA balance is received and
accepted by the Custodian or, if later, the termination date specified in the
withdrawal form.

o The date the Regular IRA or Roth IRA ceases to qualify under the tax code.
This will be deemed a termination.

o The transfer of the Regular IRA or Roth IRA to another custodian/trustee.

o The rollover of the amounts in the Regular IRA or Roth IRA to another
custodian/trustee.

Any outstanding fees must be received prior to such a termination of your
account.
The amount you receive from your IRA upon termination of the account will be
treated as a withdrawal, and thus the rules relating to Regular IRA or Roth IRA
withdrawals will apply. For example, if the IRA is terminated before you reach
age 59 1/2, the 10% early withdrawal penalty may apply to the taxable amount you
receive.

IRA DOCUMENTS

Regular IRA
The terms contained in Articles I to VII of Part One of the Investor Service
Center Individual Retirement Custodial Account document have been promulgated by
the IRS in Form 5305-A for use in establishing a Regular IRA Custodial Account
that meets the requirements of Code Section 408(a) for a valid Regular IRA. This
IRS approval relates only to the form of Articles I to VII and is not an
approval of the merits of the Regular IRA or of any investment permitted by the
Regular IRA.

Roth IRA
The terms contained in Articles I to VII of Part Two of the Investor Service
Center Individual Retirement Account Custodial Agreement have been promulgated
by the IRS in Form 5305-RA for use in establishing a Roth IRA Custodial Account
that meets the requirements of Code Section 408A for a valid Roth IRA. This IRS
approval relates only to the form of Articles I to VII and is not an approval of
the merits of the Roth IRA or of any investment permitted by the Roth IRA.
Based on legal advice relating to current tax laws and IRS meetings, the
Custodian believes that the use of a Individual Retirement Account Information
Kit such as this, containing information and documents for both a Regular IRA or
a Roth IRA, will be acceptable to the IRS. However, if the IRS makes a ruling,
or if Congress enacts legislation, regarding the use of different documentation,
to the extent it become aware of such documentation and can be reasonably
prepare such documentation, Investor Service Center will seek to forward to you
new documentation for your Regular IRA or a Roth IRA (as appropriate) for you to
read and, if necessary, an appropriate new IRA Application to sign, although
there can be no assurance of this. By adopting a Regular IRA or a Roth IRA using
these materials, you acknowledge this possibility and agree to this procedure if
necessary. In all cases, to the extent permitted, Investor Service Center will
treat your IRA as being opened on the date your account was opened using the IRA
Application in this Kit.

ADDITIONAL INFORMATION
For additional information, please call 1-800-345-0051 or write to Investor
Service Center, Inc., P.O. Box 419789, Kansas City, MO 64141-6789.

<PAGE>

Custodial Agreement

Part One: Provisions Applicable to Regular IRAs

The following provisions of Articles I to VII are in the form promulgated by the
Internal Revenue Service in Form 5305-A for use in establishing an individual
retirement custodial account.

Article I.
The Custodian may accept additional cash contributions on behalf of the
Depositor for a tax year of the Depositor. The total cash contributions are
limited to $2,000 for the tax year unless the contribution is a rollover
contribution described in section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or an
employer contribution to a simplified employee pension plan as described in
section 408(k).

Article II.
The Depositor's interest in the balance in the custodial account is
nonforfeitable.

Article III.
1. No part of the custodial funds may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled with other
property except in a common trust fund or common investment fund (within the
meaning of section 408(a)(5)).
2. No part of the custodial funds may be invested in collectibles (within
the meaning of section 408(m)) except as otherwise permitted by section
408(m)(3) which provides an exception for certain gold, silver, and platinum
coins, coins issued under the laws of any state, and certain bullion.

Article IV.
1. Notwithstanding any provisions of this agreement to the contrary, the
distribution of the Depositor's interest in the custodial account shall be made
in accordance with the following requirements and shall otherwise comply with
section 408(a)(6) and Proposed Regulations section 1.408-8, including the
incidental death benefit provisions of Proposed Regulations section
1.401(a)(9)-2, the provisions of which are incorporated by reference.
2. Unless otherwise elected by the time distributions are required to begin
to the Depositor under paragraph 3, or to the surviving spouse under paragraph
4, other than in the case of a life annuity, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to the Depositor
and the surviving spouse and shall apply to all subsequent years. The life
expectancy of a nonspouse beneficiary may not be recalculated.
3. The Depositor's entire interest in the custodial account must be, or
begin to be, distributed by the Depositor's required beginning date, the April 1
following the calendar year end in which the Depositor reaches age 70 1/2. By
that date, the Depositor may elect, in a manner acceptable to the Custodian, to
have the balance in the custodial account distributed in:
(a) A single-sum payment.
(b) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the life of the Depositor.
(c) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the joint and last survivor lives of the
Depositor and his or her designated beneficiary.
(d) Equal or substantially equal annual payments over a specified period
that may not be longer than the Depositor's life expectancy.
(e) Equal or substantially equal annual payments over a specified period
that may not be longer than the joint life and last survivor expectancy of the
Depositor and his or her designated beneficiary.
4. If the Depositor dies before his or her entire interest is
distributed to him or her, the entire remaining interest will be distributed as
follows:
(a) If the Depositor dies on or after distribution of his or her interest
has begun, distribution must continue to be made in accordance with paragraph 3.
(b) If the Depositor dies before distribution of his or her interest has
begun, the entire remaining interest will, at the election of the Depositor or,
if the Depositor has not so elected, at the election of the beneficiary or
beneficiaries, either
(i) Be distributed by the December 31 of the year containing the fifth
anniversary of the Depositor's death, or (ii)Be distributed in equal or
substantially equal payments over the life or life expectancy of the
designated beneficiary or
beneficiaries starting by December 31 of the year following the year of the
Depositor's death. If, however, the beneficiary is the Depositor's surviving
spouse, then this distribution is not required to begin before December 31 of
the year in which the Depositor would have turned age 70 1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of section 408(b)(3) and its related regulations has irrevocably
commenced, distributions are treated as having begun on the Depositor's required
beginning date, even though payments may actually have been made before that
date.
(d) If the Depositor dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may be accepted in the
account.
5. In the case of distribution over life expectancy in equal or
substantially equal annual payments, to determine the minimum annual payment for
each year, divide the Depositor's entire interest in the custodial account as of
the close of business on December 31 of the preceding year by the life
expectancy of the Depositor (or the joint life and last survivor expectancy of
the Depositor and the Depositor's designated beneficiary, or the life expectancy
of the designated beneficiary, whichever applies.) In the case of distributions
under paragraph 3, determine the initial life expectancy (or joint life and last
survivor expectancy) using the attained ages of the Depositor and designated
beneficiary as of their birthdays in the year the Depositor reaches age 70 1/2.
In the case of a distribution in accordance with paragraph 4(b)(ii), determine
life expectancy using the attained age of the designated beneficiary as of the
beneficiary's birthday in the year distributions are required to commence.

<PAGE>

6. The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524, to satisfy the
minimum distribution requirements described above. This method permits an
individual to satisfy these requirements by taking from one individual
retirement account the amount required to satisfy the requirement for another.

Article V.
1. The Depositor agrees to provide the Custodian with information necessary
for the Custodian to prepare any reports required under section 408(i) and
Regulations sections 1.408-5 and 1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue Service
and the Depositor as prescribed by the Internal Revenue Service.

Article VI.
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be controlling. Any
additional articles that are not consistent with section 408(a) and the related
regulations will be invalid.

Article VII.
This agreement will be amended from time to time to comply with the
provisions of the Code and related regulations. Other amendments may be made
with the consent of the persons whose signatures appear on the IRA Application.

PART TWO: PROVISIONS APPLICABLE TO ROTH IRA'S

The following provisions of Articles I to VII are in the form promulgated by
the Internal Revenue Service in Form 5305-RA for use in establishing a Roth
Individual Retirement Custodial Account.

Article I
1. If this Roth IRA is not designated as a Roth Conversion IRA, then, except
in the case of a rollover contribution described in section 408A(e), the
Custodian will accept only cash contributions and only up to a maximum amount of
$2,000 for any tax year of the Depositor.
2. If this Roth IRA is designated as a Roth Conversion IRA, no contributions
other than IRA Conversion Contributions made during the same tax year will be
accepted.

Article IA
The $2,000 limit described in Article I is gradually reduced to $0 between
certain levels of adjusted gross income (AGI). For a single Depositor, the
$2,000 annual contribution is phased out between AGI of $95,000 and $110,000;
for a married Depositor who files jointly, between AGI of $150,000 and $160,000;
and for a married Depositor who files separately, between $0 and $10,000. In
case of a conversion, the Custodian will not accept IRA Conversion Contributions
in a tax year if the Depositor's AGI for that tax year exceeds $100,000 or if
the Depositor is married and files a separate return. Adjusted gross income is
defined in section 408A(c)(3) and does not include IRA Conversion Contributions.

Article II
The Depositor's interest in the balance in the custodial account is
nonforfeitable.

Article III
1. No part of the custodial funds may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled with other
property except in a common trust fund or common investment fund (within the
meaning of section 408(a)(5)).
2. No part of the custodial funds may be invested in collectibles (within
the meaning of section 408(m)) except as otherwise permitted by section
408(m)(3), which provides an exception for certain gold, silver, and platinum
coins, coins issued under the laws of any state, and certain bullion.

Article IV
1. If the Depositor dies before his or her entire interest is distributed to
him or her and the Depositor's surviving spouse is not the sole beneficiary, the
entire remaining interest will, at the election of the Depositor or, if the
Depositor has not so elected, at the election of the beneficiary or
beneficiaries, either:

(a) Be distributed by December 31 of the year containing the fifth
anniversary of the Depositor's death, or (b) Be distributed over the life
expectancy of the designated beneficiary starting no later than December 31
of the year following
the year of the Depositor's death.
If distributions do not begin by the date described in (b), distribution
method (a) will apply.
2. In the case of distribution method 1(b) above, to determine the minimum
annual payment for each year, divide the Depositor's entire interest in the
custodial account as of the close of business on December 31 of the preceding
year by the life expectancy of the designated beneficiary using the attained age
of the designated beneficiary as of the beneficiary's birthday in the year
distributions are required to commence and subtract 1 for each subsequent year.
3. If the Depositor's spouse is the sole beneficiary on the Depositor's date
of death, such spouse will then be treated as the Depositor.

<PAGE>

Article V
1. The Depositor agrees to provide the Custodian with information necessary
for the Custodian to prepare any reports required under sections 408(i) and
408A(d)(3)(E), and Regulations section 1.408-5 and 1.408-6, and under guidance
published by the Internal Revenue Service.
2. The Custodian agrees to submit reports to the Internal Revenue Service
and the Depositor as prescribed by the Internal Revenue Service.

Article VI
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through IV and this sentence will be controlling. Any
additional articles that are not consistent with section 408A, the related
regulations, and other published guidance will be invalid.

Article VII
This agreement will be amended from time to time to comply with the
provisions of the Code, related regulations, and other published guidance. Other
amendments may be made with the consent of the persons whose signatures appear
below.

Part Three: Provisions Applicable to Both Regular IRAs and Roth IRAs

Article VIII.
1. As used in this Article VIII the following terms have the following
meanings:
"Account" or "Custodial Account" means the individual retirement account
established using the terms of either Part One or Part Two and, in either event,
Part Three of this Investor Service Center Individual Retirement Account
Custodial Agreement and the IRA Application signed by the Depositor. The Account
may be a Regular Individual Retirement Account or a Roth Individual Retirement
Account, as specified by the Depositor. See Section 24 below.
"Custodian" means Investors Fiduciary Trust Company.
"Fund" means any registered investment company which is advised, sponsored
or distributed by Sponsor; provided, however, that such a mutual fund or
registered investment company must be legally offered for sale in the state of
the Depositor's residence.
"Distributor" means the entity which has a contract with the Fund(s) to
serve as distributor of the shares of such Fund(s). In any case where there is
no Distributor, the duties assigned hereunder to the Distributor may be
performed by the Fund(s) or by an entity that has a contract to perform
management or investment advisory services for the Fund(s).
"IRA Provider" means the Custodian, Fund, Distributor, Sonsor, and/or
Service Company, as the content requires, which shall be interpreted for their
protection and benefit.
"Service Company" means any entity employed by the Custodian or the
Distributor, including the transfer agent for the Fund(s), to perform various
administrative duties of either the Custodian or the Distributor.
In any case where there is no Service Company, the duties assigned
hereunder to the Service Company will be performed by the Distributor (if any)
or by an entity specified in the second preceding paragraph.
"Sponsor" means Investor Service Center, Inc. or other fund entity that is
making Fund(s) available under this Agreement and has the power to appoint a
successor Custodian.
2. The Depositor may revoke the Custodial Account established hereunder by
mailing or delivering a written notice of revocation to the Custodian within
seven days after the Depositor receives the Disclosure Statement related to the
Custodial Account. Mailed notice is treated as given to the Custodian on date of
the postmark (or on the date of Post Office certification or registration in the
case of notice sent by certified or registered mail). Upon timely revocation,
the Depositor's initial contribution will be returned, without adjustment for
administrative expenses, commissions or sales charges, fluctuations in market
value or other changes. By signing the IRA Application, the Depositor certifies
that the Depositor received the Disclosure Statement related to the Custodial
Account at least seven days before the Depositor signed the IRA Application to
establish the Custodial Account, and the IRA Provider may rely upon such
certification.
3. All contributions to the Custodial Account shall be invested and
reinvested in full and fractional shares of one or more Funds. Such investments
shall be made in such proportions and/or in such amounts as Depositor from time
to time in the IRA Application or by other written notice to the Service Company
(in such form as may be acceptable to the Service Company) may direct. The
Service
Company shall be responsible for promptly transmitting all investment directions
by the Depositor for the purchase or sale of shares of one or more Funds
hereunder to the Funds' transfer agent for execution. However, if investment
directions with respect to the investment of any contribution hereunder are not
received from the Depositor as required or, if received, are unclear or
incomplete in the opinion of the Service Company, the contribution will be
returned to the Depositor, or will be held uninvested (or invested in a money
market fund if available) pending clarification or completion by the Depositor,
in either case without liability for interest or for loss of income or
appreciation. If any other directions or other orders by the Depositor with
respect to the sale or purchase of shares of one or more Funds for the Custodial
Account are unclear or incomplete in the opinion of the Service Company, the
Service Company will refrain from carrying out such investment directions or
from executing any such sale or purchase, without liability for loss of income
or for appreciation or depreciation of any asset, pending receipt of
clarification or completion from the Depositor. All investment directions by
Depositor will be subject to any minimum initial or additional investment or
minimum balance rules applicable to a Fund as described in its prospectus. All
dividends and capital gains or other distributions received on the shares of any
Fund held in the Depositor's Account shall be (unless received in additional
shares) reinvested in full and fractional shares of such
Fund (or of any other Fund offered by the Sponsor, if so directed).
4. Subject to the minimum initial or additional investment, minimum balance
and other exchange rules applicable to a Fund, the Depositor may at any time
direct the Service Company to exchange all or a specified portion of the shares
of a Fund in the Depositor's Account for shares and fractional shares of one or
more other Funds. The Depositor shall give such directions by written notice
acceptable to the Service Company, and the Service Company will process such
directions as soon as practicable after receipt thereof (subject to the second
paragraph of Section 3 of this Article VIII).

<PAGE>

5. Any purchase or redemption of shares of a Fund for or from the
Depositor's Account will be effected at the public offering price or net asset
value of such Fund (as described in the then effective prospectus for such Fund)
next established after the Service Company has transmitted the Depositor's
investment directions to the transfer agent for the Fund(s). Any purchase,
exchange, transfer or redemption of shares of a Fund for or from the Depositor's
Account will be subject to any applicable sales, redemption or other charge as
described in the then effective prospectus for such Fund.
6. The Service Company shall maintain adequate records of all purchases or
sales of shares of one or more Funds for the Depositor's Custodial Account. Any
account maintained in connection herewith shall be in the name of the Custodian
for the benefit of the Depositor. All assets of the Custodial Account shall be
registered in the name of the Custodian or of a suitable nominee. The books and
records of the Custodian shall show that all such investments are part of the
Custodial Account. The Custodian shall maintain or cause to be maintained
adequate records reflecting transactions of the Custodial Account. In the
discretion of the Custodian, records maintained by the Service Company with
respect to the Account hereunder will be deemed to satisfy the Custodian's
recordkeeping responsibilities therefor. The Service Company agrees to furnish
the Custodian with any information the Custodian requires to carry out the
Custodian's recordkeeping responsibilities.
7. Neither the Custodian nor any other party providing services to the
Custodial Account will have any responsibility for rendering advice with respect
to the investment and reinvestment of Depositor's Custodial Account, nor shall
such parties be liable for any loss or diminution in value which results from
Depositor's exercise of investment control over his Custodial Account. Depositor
shall have and exercise exclusive responsibility for and control over the
investment of the assets of his Custodial Account, and neither Custodian nor any
other such party shall have any duty to question his directions in that regard
or to advise him regarding the purchase, retention or sale of shares of one or
more Funds for the Custodial Account.
8. The Depositor may in writing appoint an investment advisor with respect
to the Custodial Account on a form acceptable to the Custodian and the Service
Company. The investment advisor's appointment will be in effect until written
notice to the contrary is received by the Custodian and the Service Company.
While an investment advisor's appointment is in effect, the investment advisor
may issue investment directions or may issue orders for the sale or purchase of
shares of one or more Funds to the IRA Provider, and the IRA Provider will be
fully protected and indemnified by the Depositor in carrying out such investment
directions or orders to the same extent as if they had been given by the
Depositor. The Depositor's appointment of any investment advisor will also be
deemed to be instructions to the IRA Provider to pay such investment advisor's
fees to the investment advisor from the Custodial Account hereunder without
additional authorization by the Depositor or the Custodian.
9. Distribution of the assets of the Custodial Account shall be made at
such time and in such form as Depositor (or the Beneficiary if Depositor is
deceased) shall elect by written order to the IRA Provider. Depositor
acknowledges that any distribution of a taxable amount from the Custodial
Account (except for distribution on account of Depositor's disability or death,
return of an "excess contribution" referred to in Code Section 4973, or a
"rollover" from this Custodial Account) made earlier than age 59 1/2 may subject
Depositor to an "additional tax on early distributions" under Code Section 72(t)
unless an exception to such additional tax is applicable. For that purpose,
Depositor will be considered disabled if Depositor can prove, as provided in
Code Section 72(m)(7), that Depositor is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or be of long continued and
indefinite duration. It is the responsibility of the Depositor (or the
Beneficiary) by appropriate distribution instructions to the IRA Provider to
insure that any applicable distribution requirements of Code Section 401(a)(9)
and Article IV above are met. If the Depositor (or Beneficiary) does not direct
the IRA Provider to make distributions from the Custodial Account by the time
that such distributions are required to commence in

<PAGE>

accordance with such distribution requirements, the IRA Provider shall assume
that the Depositor (or Beneficiary) is meeting the minimum distribution
requirements from another individual retirement arrangement maintained by the
Depositor (or Beneficiary) and the IRA Provider shall be fully protected and
indemnified by the depositor in so doing. The Depositor (or the Depositor's
surviving spouse) may elect to comply with the distribution requirements in
Article IV using the recalculation of life expectancy method, or may elect that
the life expectancy of the Depositor and/or the Depositor's surviving spouse, as
applicable, will not be recalculated; any such election may be in such form as
the Depositor (or surviving spouse) provides (including the calculation of
minimum distribution amounts in accordance with a method that does not provide
for recalculation of the life expectancy of one or both of the Depositor and
surviving spouse and instructions for withdrawals to the IRA Provider in
accordance with such method). Notwithstanding paragraph 2 of Article IV, unless
an election to have life expectancies recalculated annually is made by the time
distributions are required to begin, life expectancies shall not be
recalculated. Neither the IRA Provider nor any other party providing services to
the Custodial Account assumes any responsibility for the tax treatment of any
distribution from the Custodial Account; such responsibility rests solely with
the person ordering the distribution.
10. IRA Provider assumes (and shall have) no responsibility to make any
distribution except upon the written order of Depositor (or Beneficiary if
Depositor is deceased) containing such information as the IRA Provider may
reasonably request. Also, before making any distribution or honoring any
assignment of the Custodial Account, IRA Provider shall be furnished with any
and all applications, certificates, tax waivers, signature guarantees and other
documents (including proof of any legal representative's authority) deemed
necessary or advisable by Ira Provider, but Ira Provider shall not be
responsible for complying with any order or instruction which appears on its
face to be genuine, or for refusing to comply if not satisfied it is genuine,
and Ira Provider has no duty of further inquiry. Any distributions from the
Account may be mailed, first-class postage prepaid, to the last known address of
the person who is to receive such distribution, as shown on the Ira Provider's
records, and such distribution shall to the extent thereof completely discharge
the Ira Provider's liability for such payment.
11. (a) The term "Beneficiary" means the person or persons designated as
such by the "designating person" (as defined below) on a form acceptable to the
Ira provider for use in connection with the Custodial Account, signed by the
designating person, and filed with the IRA Provider. The form may name
individuals, trusts, estates, or other entities as either primary or contingent
beneficiaries. However, if the designation does not effectively dispose of the
entire Custodial Account as of the time distribution is to commence, the term
"Beneficiary" shall then mean the designating person's estate with respect to
the assets of the Custodial Account not disposed of by the designation form. The
form last accepted by the IRA Provider before such distribution is to commence,
provided it was received by the IRA Provider (or deposited in the U.S. Mail or
with a reputable delivery service) during the designating person's lifetime,
shall be controlling and, whether or not fully dispositive of the Custodial
Account, thereupon shall revoke all such forms previously filed by that person.
The term "designating person" means Depositor during his/her lifetime; after
Depositor's death, it also means Depositor's spouse, but only if the spouse
elects to treat the Custodial Account as the spouse's own Custodial Account in
accordance with applicable provisions of the Code.
(b) When and after distributions from the Custodial Account to Depositor's
Beneficiary commence, all rights and obligations assigned to Depositor hereunder
shall inure to, and be enjoyed and exercised by, Beneficiary instead of
Depositor.
12. (a) The Depositor agrees to provide information to the IRA Provider at
such time and in such manner as may be necessary for the IRA Provider to prepare
any reports required under Section 408(i) or Section 408A(d)(3)(E) of the Code
and the regulations thereunder or otherwise.
(b) The IRA Provider will submit reports to the Internal Revenue Service
and the Depositor at such time and manner and containing such information as is
prescribed by the Internal Revenue Service.
(c) The Depositor, IRA Provider shall furnish to each other such
information relevant to the Custodial Account as may be required under the Code
and any regulations issued or forms adopted by the Treasury Department
thereunder or as may otherwise be necessary for the administration of the
Custodial Account.
(d) The Depositor shall file any reports to the Internal Revenue Service
which are required of him by law (including Form 5329), and the IRA Provider
shall not have any duty to advise Depositor concerning or monitor Depositor's
compliance with such requirement.
13. (a) Depositor retains the right to amend this Custodial Account
document in any respect at any time, effective on a stated date which shall be
at least 60 days after giving written notice of the amendment (including its
exact terms) to IRA Provider by registered or certified mail, unless IRA
Provider waives notice as to such amendment. If the IRA Provider does not wish
to continue serving as such under this Custodial Account document as so amended,
it may resign in accordance with Section 17 below.

<PAGE>

(b) Depositor delegates to the IRA Provider the Depositor's right so to
amend, provided (i) the IRA Provider does not change the investments available
under this Custodial Agreement and (ii) the IRA Provider amends in the same
manner all agreements comparable to this one, having the same IRA Provider,
permitting comparable investments, and under which such power has been delegated
to it; this includes the power to amend retroactively if necessary or
appropriate in the opinion of the IRA Provider in order to conform this
Custodial Account to pertinent provisions of the Code and other laws or
successor provisions of law, or to obtain a governmental ruling that such
requirements are met, to adopt a prototype or master form of agreement in
substitution for this Agreement, or as otherwise may be advisable in the opinion
of the IRA Provider. Such an amendment by the IRA Provider shall be
communicated in writing to Depositor, and Depositor shall be deemed to have
consented thereto unless, within 10 days after such communication to Depositor
is mailed, Depositor either (i) gives IRA Provider a written order for a
complete distribution or transfer of the Custodial Account, or (ii) removes the
IRA Provider and appoints a successor under Section 17 below. Pending the
adoption of any amendment necessary or desirable to conform this Custodial
Account document to the requirements of any amendment to any applicable
provision of the Internal Revenue Code or regulations or rulings thereunder, the
IRA Provider and the Service Company may operate the Depositor's Custodial
Account in accordance with such requirements to the extent that the IRA Provider
and/or the Service Company deem necessary to preserve the tax benefits of the
Account.
(c) Notwithstanding the provisions of subsections (a) and (b) above, no
amendment shall increase the responsibilities or duties of IRA Provider without
its prior written consent.
(d) This Section 13 shall not be construed to restrict the IRA Provider's
right to substitute fee schedules in the manner provided by Section 16 below,
and no such substitution shall be deemed to be an amendment of this Agreement.
14. (a) Custodian shall terminate the Custodial Account if this Agreement
is terminated or if, within 30 days (or such longer time as Custodian may agree)
after resignation or removal of Custodian under Section 17, Depositor or
Sponsor, as the case may be, has not appointed a successor which has accepted
such appointment. Termination of the Custodial Account shall be effected by
distributing all assets thereof in a single payment in cash or in kind to
Depositor, subject to Custodian's right to reserve funds as provided in Section
17.
(b) Upon termination of the Custodial Account, this custodial account
document shall have no further force and effect (except for Sections 15(f),
17(b) and (c) hereof which shall survive the termination of the Custodial
Account and this document), and Custodian shall be relieved from all further
liability hereunder or with respect to the Custodial Account and all assets
thereof so distributed.
15. (a) In its discretion, the IRA Provider may appoint one or more
contractors or service providers to carry out any of their functions and may
compensate them from the Custodial Account for expenses attendant to those
functions. In the event of such appointment, all rights and privileges of the
IRA Provider under this Agreement shall pass through to such contractors or
service providers who shall be entitled to enforce them as if a named party.
(b) The IRA Provider shall be responsible for receiving all instructions,
notices, forms and remittances from Depositor and for dealing with or forwarding
the same to the transfer agent for the Fund(s).
(c) The parties do not intend to confer any fiduciary duties on IRA
Provider (or any other party providing services to the Custodial Account), and
none shall be implied. Neither shall be liable (or assumes any responsibility)
for the collection of contributions, the proper amount, time or tax treatment of
any contribution to the Custodial Account or the propriety of any contributions
under this Agreement, or the purpose, time, amount (including any minimum
distribution amounts), tax treatment or propriety of any distribution hereunder,
which matters are the sole responsibility of Depositor and Depositor's
Beneficiary.
(d) Not later than 60 days after the close of each calendar year (or after
the IRA Provider's resignation or removal), the IRA Provider or Service Company
shall file with Depositor a written report or reports reflecting the
transactions effected by it during such period and the assets of the Custodial
Account at its close. Upon the expiration of 60 days after such a report is sent
to Depositor (or Beneficiary), the IRA Provider and their affiliates shall be
forever released and discharged from all liability and accountability to anyone
with respect to transactions shown in or reflected by such report and shall be
indemnified by Depositor in connection therewith except with respect to any such
acts or transactions as to which Depositor shall have filed written objections
with the IRA Provider within such 60 day period.
(e) The Service Company shall deliver, or cause to be delivered, to
Depositor all notices, prospectuses, financial statements and other reports to
shareholders, proxies and proxy soliciting materials relating to the shares of
the Funds(s) credited to the Custodial Account. No shares shall be voted, and no
other action shall be taken pursuant to such documents, except upon receipt of
adequate written instructions from Depositor.
(f) Depositor shall always fully indemnify the IRA Provider and their
affiliates and save them harmless from any and all liability whatsoever which
may arise either (i) in connection with this Agreement and the matters which it
contemplates, except that which arises directly out of the IRA Provider's or
their affiliate's, bad faith, gross negligence or willful misconduct, (ii) with
respect to making or failing to make any distribution, other than for failure to
make distribution in accordance with an order therefor which is in full
compliance with Section 10, or (iii) actions taken or omitted in good faith by
such parties. None of the IRA Providers shall be obligated or expected to
commence or defend any legal action or proceeding in connection with this
Agreement or such matters unless agreed upon by that party and Depositor, and
unless fully indemnified for so doing to that party's satisfaction.
(g) The IRA Providers shall each be responsible solely for performance of
those duties expressly assigned to it in this Agreement, and neither assumes any
responsibility as to duties assigned to anyone else hereunder or by operation of
law.
(h) The IRA Provider may each conclusively rely upon and shall be protected
in acting upon any written order from Depositor or Beneficiary, or any
investment advisor appointed under Section 8, or any other notice, request,
consent, certificate or other instrument or paper believed by it to be genuine
and to have been properly executed, and so long as it acts in good faith, in
taking or omitting to take any other action in reliance thereon. In addition,
IRA Provider will carry out the requirements of any apparently valid court order
relating to the Custodial Account and will incur no liability or responsibility
for so doing.
16. (a) The Depositor, in consideration of the services received under this
Agreement, shall pay the fees specified on the applicable fee schedule. The fee
schedule originally applicable shall be the one specified in the IRA Application
or Disclosure Statement, as applicable. The Sponsor may substitute a different
fee schedule at any time upon 30 days' notice to Depositor. The Depositor shall
also pay reasonable fees for any services not contemplated by any applicable fee
schedule and either deemed by the IRA Provider to be necessary or desirable or
requested by Depositor.

<PAGE>

(b) Any income, gift, estate and inheritance taxes and other taxes of any
kind whatsoever, including transfer taxes incurred in connection with the
investment or reinvestment of the assets of the Custodial Account, that may be
levied or assessed in respect to such assets, and all other administrative
expenses incurred by the IRA Provider in the performance of its duties
(including fees for legal services rendered to it in connection with the
Custodial Account) shall be charged to the Custodial Account. If the IRA
Provider is required to pay any such amount, the Depositor (or Beneficiary)
shall promptly upon notice thereof reimburse the IRA Provider.
(c) All such fees and taxes and other administrative expenses charged to
the Custodial Account shall be collected either from the amount of any
contribution or distribution to or from the Account, or (at the option of the
person entitled to collect such amounts) to the extent possible under the
circumstances by the conversion into cash of sufficient shares of one or more
Funds held in the Custodial Account (without liability for any loss incurred
thereby). Notwithstanding the foregoing, the IRA Provider may make demand upon
the Depositor for payment of the amount of such fees, taxes and other
administrative expenses. Fees which remain outstanding after 60 days may be
subject to a collection charge.
17. (a) Upon 30 days' prior written notice to the Custodian, Depositor or
Sponsor, as the case may be, may remove it from its office hereunder. Such
notice, to be effective, shall designate a successor custodian and shall be
accompanied by the successor's written acceptance. The Custodian also may at any
time resign upon 30 days' prior written notice to Sponsor, whereupon the Sponsor
shall notify the Depositor (or Beneficiary) and shall appoint a successor to the
Custodian. In connection with its resignation hereunder, the Custodian may, but
is not required to, designate a successor custodian by written notice to the
Sponsor or Depositor (or Beneficiary), and the Sponsor or Depositor (or
Beneficiary) will be deemed to have consented to such successor unless the
Sponsor or Depositor (or Beneficiary) designates a different successor custodian
and provides written notice thereof together with such a different successor's
written acceptance by such date as the Custodian specifies in its original
notice to the Sponsor or Depositor (or Beneficiary) (provided that the Sponsor
or Depositor (or Beneficiary) will have a minimum of 30 days to designate a
different successor).
(b) The successor custodian shall be a bank, insured credit union, or other
person satisfactory to the Secretary of the Treasury under Code Section
408(a)(2). Upon receipt by Custodian of written acceptance by its successor of
such successor's appointment, Custodian shall transfer and pay over to such
successor the assets of the Custodial Account and all records (or copies
thereof) of Custodian pertaining thereto, provided that the successor custodian
agrees not to dispose of any such records without the Custodian's consent.
Custodian is authorized, however, to reserve such sum of money or property as it
may deem advisable for payment of all its fees, compensation, costs, and
expenses, or for payment of any other liabilities constituting a charge on or
against the assets of the Custodial Account or on or against the IRA Provider,
with any balance of such reserve remaining after the payment of all such items
to be paid over to the successor custodian.
(c) No IRA Provider shall be liable for the acts or omissions of its
predecessor or its successor.
18. References herein to the "Internal Revenue Code" or "Code" and sections
thereof shall mean the same as amended from time to time, including successors
to such sections.
19. Except where otherwise specifically required in this Agreement, any
notice from IRA Provider to any person provided for in this Agreement shall be
effective if sent by first-class mail to such person at that person's last
address on the IRA Provider's records.
20. Depositor or Depositor's Beneficiary shall not have the right or power
to anticipate any part of the Custodial Account or to sell, assign, transfer,
pledge or hypothecate any part thereof. The Custodial Account shall not be
liable for the debts of Depositor or Depositor's Beneficiary or subject to any
seizure, attachment, execution or other legal process in respect thereof except
to the extent required by law. At no time shall it be possible for any part of
the assets of the Custodial Account to be used for or diverted to purposes other
than for the exclusive benefit of the Depositor or his/her Beneficiary except to
the extent required by law.
21. When accepted by the Custodian, this Agreement is accepted in and shall
be construed and administered in accordance with the laws of the state where the
principal offices of the Custodian are located. Any action involving the
Custodian brought by any other party must be brought in a state or federal court
in such state.
If in the IRA Application, Depositor designates that the Custodial Account
is a Regular IRA, this Agreement is intended to qualify under Code Section
408(a) as an individual retirement Custodial Account and to entitle Depositor to
the retirement savings deduction under Code Section 219 if available. If in the
IRA ApplicationDepositor designates that the Custodial Account is a Roth IRA,
this Agreement is intended to qualify under Code Section 408A as a Roth
individual retirement Custodial Account and to entitle Depositor to the tax-free
withdrawal of amounts from the Custodial Account to the extent permitted in such
Code section. If any provision hereof is subject to more than one interpretation
or any term used herein is subject to more than one construction, such ambiguity
shall be resolved in favor of that interpretation or construction which is
consistent with the intent expressed in whichever of the two preceding sentences
is applicable. However, the IRA Provider shall not be responsible for whether or
not such intentions are achieved through use of this Agreement, and Depositor is
referred to Depositor's attorney for any such assurances.
22. Depositor should seek advice from Depositor's attorney regarding the
legal consequences (including but not limited to federal and state tax matters)
of entering into this Agreement, contributing to the Custodial Account, and
ordering IRA Provider to make distributions from the Account. Depositor
acknowledges that IRA Provider (and any company associated therewith) are
prohibited by law from rendering such advice.

<PAGE>

23. If any provision of any document governing the Custodial Account
provides for notice, instructions or other communications from one party to
another in writing, to the extent provided for in the procedures of the IRA
Provider or any other party, any such notice, instructions or other
communications may be given by telephonic, computer, other electronic or other
means, and the requirement for written notice will be deemed satisfied.
24. The legal documents governing the Custodial Account are as follows:
(a) If in the IRA Applicationthe Depositor designated the Custodial Account
as a Regular IRA under Code Section 408(a), the provisions of Part One and Part
Three of this Agreement and the provisions of the IRA Applicationare the legal
documents governing the Depositor's Custodial Account.
(b) If in the IRA Applicationthe Depositor designated the Custodial Account
as a Roth IRA under Code Section 408A, the provisions of Part Two and Part Three
of this Agreement and the provisions of the IRA Application are the legal
documents governing the Depositor's Custodial Account.
(c) In the IRA Application the Depositor must designate the Custodian
Account as either a Roth IRA or a Regular IRA, and a separate account will be
established for such IRA. One Custodial Account may not serve as a Roth IRA and
a Regular IRA (through the use of subaccounts or otherwise).
25. Articles I through VII of Part One of this Agreement are in the form
promulgated by the Internal Revenue Service as Form 5305-A. It is anticipated
that, if and when the Internal Revenue Service promulgates changes to Form
5305-A, the IRA Provider will amend this Agreement correspondingly.
Articles I through VII of Part Two of this Agreement are in the form
promulgated by the Internal Revenue Service as Form 5305-RA. It is anticipated
that, if and when the Internal Revenue Service promulgates changes to Form
5305-RA, the IRA Provider will amend this Agreement correspondingly. The
Internal Revenue Service has endorsed the use of documentation permitting a
Depositor to establish either a Regular IRA or Roth IRA (but not both using a
single IRA Application), and this Kit complies with the requirements of the IRS
guidance for such use. If the Internal Revenue Service subsequently determines
that such an approach is not permissible, or that the use of a "combined" IRA
Application does not establish a valid Regular IRA or a Roth IRA (as the case
may be), the IRA Provider will seek to furnish the Depositor with replacement
documents and the Depositor will if necessary sign such replacement documents.
Depositor acknowledge and agrees to such procedures and to cooperate with IRA
Provider to preserve the intended tax treatment of the Account.
26. If the Depositor maintains an Individual Retirement Account under Code
section 408(a), Depositor may convert or transfer such other IRA to a Roth IRA
under Code section 408A using the terms of this Agreement and the IRA
Application by completing and executing the IRA Application and giving suitable
directions to the IRA Provider and the custodian or trustee of such other IRA.
Alternatively, the Depositor may convert or transfer such other IRA to a Roth
IRA by use of a reply card or by telephonic, computer or electronic means in
accordance with procedures adopted by the IRA Provider intended to meet the
requirements of Code section 408A, and the Depositor will be deemed to have
executed the IRA Application and adopted the provisions of this Agreement and
the IRA Application in accordance with such procedures.
27. The Depositor acknowledges that he or she has received and read the
current prospectus for each Fund in which his or her Account is invested and the
Individual Retirement Account Disclosure Statement related to the Account. The
Depositor represents under penalties of perjury that his or her Social Security
number (or other Taxpayer Identification Number) as stated in the IRA
Application is correct.

<PAGE>

IRAK-1/98

[DESCRIPTION] ISC 403(b)(7) Custodial Agreement

IMPORTANT INFORMATION ABOUT YOUR INVESTOR SERVICE CENTER 403(B)(7) ACCOUNT

Dear Investor Service Center 403(b)(7) Account Holder:

Recent legislation makes some changes in the tax law rules for the 403(b)(7)
custodial accounts. The main changes for 403(b)(7) accounts are as follows:

Previously, an employee could make only one salary reduction agreement (or one
modification to an existing salary reduction agreement) in a calendar year. Now,
an employee may (subject to any reasonable limitations imposed by his employer)
change his/her salary reduction agreement as often as he wishes. The only
requirement is that any change may relate only to compensation to be earned in
the future (i.e. future pay periods), not to any pay already earned at the
effective date of the change.

The current tax law rule requiring an employee to start receiving distributions
from his 403(b)(7) account on the April 1 following the calendar year in which
the employee reaches age 702 has been changed. Under the new rule, distributions
must start by the April 1 following the year in which the employee reaches age
702 or retires, whichever is later. This change is effective as of January 1,
1997.

The method for calculating the maximum 403(b)(7) contribution by an employee has
changed. First, the limit on voluntary salary reductions by an individual
(including both salary reduction contributions to a 403(b)(7) account or to a
401(k) plan) has been increased from $9,500 in 1997 to $10,000 in 1998. Second,
the definition of Acompensation@ for purposes of calculating certain other
limits on an individual=s contribution have been changed. Starting in 1998,
compensation before salary reductions will be used to determine these other
contribution limits. These changes in general will result in eligible employees
being able to make larger 403(b)(7) contributions in 1998.

The tax law rule imposing a 15% penalty tax on very large withdrawals from
tax-favored retirement arrangements, including 403(b)(7) custodial accounts,
IRAs and qualified employer-sponsored plans has been repealed. A related 15%
penalty tax on large accumulations remaining in such tax-favored arrangements at
an individual=s death has also been repealed.

Enclosed is an amendment and restatement of your 403(b)(7) Account Agreement.
This amendment revises your Agreement to reflect the new tax law changes and to
make other technical or clarifying changes. YOU DO NOT NEED TO SIGN ANYTHING OR
RETURN ANYTHING TO US.

It is our pleasure to serve your retirement planning needs by continually
revising the documentation for your 403(b)(7) account as tax laws and other
legal rules change.

<PAGE>

INVESTOR SERVICE CENTER SECTION 403(B)(7) CUSTODIAL ACCOUNT AGREEMENT

AMENDED AND RESTATED AS OF JANUARY 1, 1998

ARTICLE I

DEFINITIONS

1.1 Account: The custodial account established and maintained under
this Agreement on behalf of the Employee pursuant to Section 403(b)(7) of the
Code.

1.2 Account Holder: The Employee, or, after the death of the Employee,
the Beneficiary of the Employee, or executor or administrator of the estate of
the Employee entitled to direct investment of assets held in the Account.

1.3 Agreement: The Investor Service Center Section 403(b)(7) Custodial
Account Agreement as set forth herein (and as it may be amended from time to
time).

1.4 Application: The Application for the Investor Service Center
Section 403(b)(7) Custodial Account executed by the Employee and the Custodian
providing for the establishment of the Account in accordance with the terms and
conditions of this Agreement.

1.5 Beneficiary: The person or persons designated in accordance with
the provisions of Article 5.6 to receive any undistributed amounts credited to
the Account upon the death of the Employee. No person(s) will be treated as a
Beneficiary hereunder until the Custodian has been provided with such
verification of the Employee's death as the Custodian deems necessary, and the
Custodian will incur no liability (including but not limited to liability for
investment losses or loss of appreciation) for not treating the Beneficiary or,
if applicable, the Executor or Administrator of the Employee's estate, as the
Account Holder until the Employee's death has been so verified, and the
Custodian has been provided with such verification as the Custodian deems
necessary of the identity of the person claiming to be Beneficiary or of the
valid appointment of the person claiming to be Executor or Administrator.

1.6 Code: The Internal Revenue Code of 1986, as amended, and including
any regulations or rulings issued thereunder.

1.7 Company: [Name of Mutual Fund Management Company].
Contributions to the Account shall be invested in one or more Funds which have
an investment management, distribution and/or service contract with the Company.

1.8 Custodian: Investors Fiduciary Trust Company or any successor
thereto appointed in accordance with the provisions of Article 8, provided that
such successor is either a bank or another person who satisfies the requirements
of Section 401(f)(2) of the Code.

1.9 Direct Contribution: The amount, other than a Salary Reduction
Contribution, contributed by the employer to the Account.

1.10 Disability: A determination that the Employee is unable to engage
in any substantial gainful activity by reason of a medically determinable
physical or mental impairment which can be expected to result in death or to be
of long-continued and indefinite duration.

<PAGE>

1.11 Employee: The individual who has executed the Application and who
is employed by the Employer on a full or part-time basis or who is a former or
retired employee of the Employer.

1.12 Employer: The employer that is:

(a) described in Section 501(c)(3) of the Code and exempt
from tax under Section 501(a) of the Code; or

(b) a State, a political subdivision of a State, or an
agency or instrumentality thereof, but only with
respect to employees who perform or have performed
services for an educational organization described in
Section 170(b)(1)(A)(ii) of the Code;

and, except with respect to an Account to which no contributions other than
rollovers or transfers are made, the Employer that has executed the Application.

1.13 ERISA: The Employee Retirement Income Security Act of 1974, as
amended, including any regulations issued thereunder.

1.14 Financial Hardship: A determination that the Employee has an
immediate and heavy financial need requiring a distribution from the Account.
Any determination of the existence of a qualifying financial hardship on the
part of the Employee and the amount required to be distributed to meet the need
created by the hardship shall be made in accordance with the rules and
regulations under Section 403(b)(7) of the Code.

1.15 Fund(s): One or more of the regulated investment companies offered
by [Name of funds], a [state] corporation, as available investments under this
Agreement.

1.16 Salary Reduction Agreement: The Salary Reduction Agreement
described in Article 3.2.

1.17 Salary Reduction Contribution: The amount contributed by the
Employer to the Account in accordance with a Salary Reduction Agreement.

ARTICLE II

ESTABLISHMENT OF ACCOUNT

2.1 Purpose. This Agreement is intended to provide for the
establishment and administration of an Account to receive contributions by the
Employer on behalf of the Employee in accordance with Section 403(b)(7) of the
Code or to receive rollover contributions or transfers from another 403(b)
annuity contract or custodial account.

2.2 Establishment of Account. The Custodian shall establish and
maintain the Account for the benefit of the Employee according to the terms and
conditions of this Agreement. The name, address and social security number of
the Employee and Beneficiary are set forth on the Application, and it shall be
the obligation of the Account Holder to notify the Custodian of any changes
thereto. The Application and, if applicable, the Salary Reduction Agreement, are
incorporated herein by reference. The Account will become effective upon
acceptance by or on behalf of the Custodian, as evidenced by written
confirmation to the Employee.

ARTICLE III

CONTRIBUTIONS

<PAGE>

3.1 Contributions. The Employer shall make Salary Reduction
Contributions to the Account on behalf of the Employee in accordance with the
Salary Reduction Agreement between the Employer and the Employee as described in
Article 3.2, subject to the limitations of Articles 3.4, 3.5, and 3.6. In
addition, the Employer may make Direct Contributions to the Account on behalf of
any Employee in accordance with any retirement plan, fund or program covering
the Employee, subject to the limitations of Article 3.4, the nondiscrimination
requirements of Code section 403(b)(12), and applicable requirements of ERISA.

3.2 Salary Reduction Agreement. The Salary Reduction Agreement shall be
a legally binding agreement between the Employer and the Employee whereby the
Employee agrees to take a reduction in salary or to forego an increase in salary
with respect to amounts earned after the agreement's effective date, and whereby
the Employer agrees to contribute the amount of salary reduced or foregone by
the Employee to the Account. The Salary Reduction Agreement may be terminated at
any time by the Employee with respect to amounts not yet earned by the Employee.

3.3 Limitations in General. The Employee shall compute and determine
the maximum amount that may be contributed on behalf of the Employee in
accordance with the Employee's exclusion allowance, as defined in Section
403(b)(2) of the Code, and in accordance with the applicable limitations under
Section 415(c) of the Code and, if applicable, in accordance with Section 402(g)
of the Code. Neither the Custodian nor the Company shall have any liability or
responsibility with respect to such computations or determinations, or for any
tax imposed on any excess contributions that exceed the limitations or exclusion
allowance, which matters are solely the responsibility of the Employee.

3.4 Contribution Limitations.

(a) No amount shall be contributed on behalf of the
Employee for any limitation year in excess of the
applicable limitations of Section 415(c) of the Code.
In the absence of a special election by the Employee
under Section 415(c)(4) of the Code, the amount
contributed shall not exceed the lesser of:

(i) $30,000 (or, if greater, one-fourth the
defined benefit plan dollar limitation in
effect under Section 415(b)(1) of the Code
for the limitation year); or

(ii) 25 percent of the Employee's compensation
(within the meaning of Section 415(c)(3) of
the Code) for the limitation year.

(b) The term "limitation year" shall mean the calendar
year, unless the Employee elects to change the
limitation year to another twelve-month period by
attaching a statement to his or her federal income
tax return in accordance with the regulations under
Section 415 of the Code. If the Employee is
in control (within the meaning of Code Section 414(b)
or (c), as modified by Code Section 415(h)) of the
Employer, the limitation year shall be the same as
the limitation year of
the Employer under Section 415 of the Code.

(c) If the Employer or any affiliated employer as
described in Section 415(h) of the Code makes
contributions on behalf of the Employee to any other
custodial account or annuity contract described in
Section 403(b) of the Code, then the contributions to
such annuity contract shall be combined with
the contributions to the Account for purposes of the
limitations of subsection (a). If the Employee is
covered by a qualified plan sponsored by an entity
controlled by the

<PAGE>

Employee, then contributions to such a plan shall
also be included for the purposes of the limitations
of subsection (a).

3.5 Exclusion from Gross Income. For federal tax purposes, the Employee
may exclude from gross income for any taxable year the Employer contributions
that are made to the Account to the extent such contributions do not exceed the
Employee's exclusion allowance under Section 403(b)(2) of the Code for the
taxable year (and all other applicable limitations, including those set forth in
Sections 3.4 and 3.7).

3.6 Excess Contributions. Any excess contributions (as defined in
Section 4973(c) of the Code) that are made to the Account shall be subject to
the six percent excise tax of Section 4973(a) of the Code. Neither the Custodian
nor the Company shall have any duty or responsibility for determining whether
any contributions to the Account are excludable from the Employee's gross
income, or for assuring that any contributions to the Account do not constitute
excess contributions for purposes of Code Section 4973. The disposition of
excess contributions will be made in accordance with instructions from the
Employer, if the Employee has not separated from service, or otherwise, from the
Employee. The Employer or Employee providing such instructions is responsible
for determining that they are consistent with applicable law.

3.7 Limitation on Salary Reduction Contributions.

(a) Employer contributions that are made to the Account pursuant
to a Salary Reduction Agreement shall not exceed the amount
of $10,000, or such greater amounts as may be permitted with
respect to the Employee for the taxable year under Section
402(g)(5) of the Code, reduced by the aggregate amounts
contributed in any calendar year at the election of the
Employee to any qualified cash and deferred arrangement
described in Section 401(k) of the Code, any simplified
employee pension described in Section 408(k)(6) of the Code,
any Simple IRA described in Section 408(p) of the Code, and
any eligible deferred compensation plan described in Section
457 of the Code.

(b) Notwithstanding any provision of this Agreement to the
contrary, if the Employee determines that an amount
contributed during a taxable year to the Account exceeds the
limitation set forth in subsection (a), and no later than
March 1 of the following taxable year notifies the Custodian
in writing of the excess amount the Employee has determined,
then the Custodian shall distribute such excess amount, plus
any income or minus any losses allocable thereto, to the
Employee no later than the following April 15. The Employee
shall have the sole responsibility for timely determining
any excess deferrals to the Account and notifying the
Custodian in accordance with these procedures.

(c) Neither the Custodian nor the Company shall have any
duty or responsibility for determining whether any
contributions to the Account constitute excess
deferrals as described in Section 402(g)(2)(A) of the
Code, or for assuring that any excess deferrals are
timely distributed in accordance with the procedures
of Section 402(g)(2)(A) of the Code.

<PAGE>

3.8 Rollover Contributions and Transfers.

(a) The Employee shall be permitted to make a rollover
contribution to the Account of an amount received by
the Employee that is attributable to participation in
another annuity contract or custodial account
described in Section 403(b) of the Code, provided
such rollover contribution complies with all
requirements of Section 403(b)(8) or Section
408(d)(3)(A)(iii) of the Code, whichever is
applicable.

(b) The Custodian may accept a direct transfer of assets to the
Account on behalf of the Employee from another annuity
contract or custodial account described in Section 403(b) of
the Code to the extent permitted by the Code and the
regulations and rulings thereunder. The Employee shall not
request or initiate a transfer (or a rollover) from a contract
or account containing distribution restrictions that are more
restrictive than those provided in Article V. The Employee
shall not request or initiate a transfer from a contract or
account covered by ERISA, unless the transferee Account is
part of an employee benefit plan which provides distribution
restrictions which meet the requirements of Section 205 of
ERISA and the regulations thereunder with respect to any
amount transferred.

(c) Neither the Custodian nor the Company shall have any
duty or responsibility for determining whether any
rollover contribution or transfer of assets by or on
behalf of the Employee pursuant to this Article 3.8
is a proper rollover contribution or transfer of
assets under the Code, or for the tax treatment to
the Employee of any transfer or rollover.

(d) To the extent permitted under applicable law, the Account
Holder reserves the right to transfer or rollover any or all
of the assets of the Account to such other form of annuity
contract or custodial account described in Section 403(b) of
the Code or to such Individual Retirement Account (IRA) or
other plan established pursuant to Section 408 of the Code as
the Employee may determine, upon written instructions to the
Custodian, in a form acceptable to the Custodian; provided,
however that the Custodian shall have no responsibility for
the tax treatment to the Account Holder of any such transfer
or rollover.

(e) The Custodian shall not be liable for losses arising from the
acts, omissions, or delays or other inaction of any party
transferring assets to the Account or receiving assets
transferred from the Account pursuant to this Article, or for
determining or inquiring into whether any account or annuity
transferring assets to or receiving assets from the Account
complies with all applicable requirements of the Code and IRS
rulings or for the tax or other consequences of noncompliance.

3.9 Manner of Making Contributions. All contributions to the Account
shall be paid directly to the Custodian. Contributions may be made by check or
bank wire. Contributions shall be preceded or accompanied by written
instructions directing the investment of the amount contributed on behalf of the
Employee in accordance with Article 4.1.

<PAGE>

ARTICLE IV

INVESTMENTS

4.1 Investment of Account. All contributions to the Account and all
assets in the Account shall be invested in the Fund(s) in accordance with
instructions given to the Custodian by the Account Holder in a manner acceptable
to the Custodian. Such instructions shall remain in effect until changed by the
Account Holder in a manner acceptable to the Custodian. By giving any such
instructions, the Account Holder will be deemed to have acknowledged receipt of
the then current prospectus of any Fund in which the Account Holder instructs
the Custodian to invest such contributions or assets. If the Custodian receives
any contribution to the Account that is not accompanied by acceptable
instructions directing its investment, the Custodian may hold or return all or a
part of the contribution uninvested (or invested in a money market fund if
available) without liability for loss of income or appreciation pending receipt
of acceptable instructions.

4.2 Investment Advice. The Account Holder agrees that neither the
Custodian nor the Company undertake to provide any advice with respect to the
investment of the Account, and that the responsibility of the Custodian to
invest in shares of a particular Fund pursuant to the directions of the Account
Holder does not constitute an endorsement by the Custodian of that Fund. The
Account Holder will have sole power and responsibility for the investment of the
Account in shares of one or more Funds selected by the Account Holder. Neither
the Custodian nor the Company shall be liable for any loss that results from the
exercise of control over the Account by the Account Holder.

4.3 Account Earnings. All dividends, capital gains distributions and
other earnings received by the Custodian on any shares of a Fund held in the
Account shall be automatically reinvested in additional shares of such Fund.

4.4 Investment Exchanges. The Account Holder may direct the Custodian
to redeem any or all shares of any Fund that are held in the Account and to
reinvest the proceeds in any other Fund available under this Agreement. Any such
directions shall be given in a manner acceptable to the Custodian. If any such
directions are incomplete or ambiguous, the Custodian will not carry out such
directions until the incompleteness or ambiguity is resolved, and the Custodian
will have no liability for loss of income or appreciation pending the resolution
of such incompleteness or ambiguity. By giving any such directions, the Account
Holder will be deemed to have acknowledged receipt of the then current
prospectus of any Fund in which the Account Holder instructs the Custodian to
reinvest such proceeds. Any such exchange transaction shall conform with the
provisions of the current prospectus for the applicable Fund.

4.5 Record Ownership; Voting of Shares. All Fund shares acquired by the
Custodian pursuant to this Agreement shall be registered in the name of the
Custodian or its nominee. The Custodian shall mail or transmit to the Account
Holder's address of record all notices, prospectuses, financial statements,
proxies and proxy soliciting materials relating to the shares held in the
Account. The Custodian shall not vote any such shares except in accordance with
written instructions received from the Account Holder, provided however, that
the Custodian may, in the absence of instructions, vote "present" for the sole
purpose of allowing such shares to be counted for establishment of a quorum at a
shareholder's meeting.

ARTICLE V

DISTRIBUTION OF ASSETS OF ACCOUNT

<PAGE>

5.1 Request for Distribution. The Custodian shall distribute the assets
of the Account to the Employee upon receipt by the Custodian of a written
request for distribution submitted by the Employee, in a form acceptable to the
Custodian, subject to the limitations of Article 5.2.

5.2 Limitations on Distributions. Except as may otherwise be provided
in Article 3.6 or Article 3.7(b), the assets of the Account shall not be
distributed to the Employee before the Employee attains age 59-1/2 unless the
Employee has:

(a) separated from the service of the Employer,

(b) incurred a Disability, or

Any distribution that is made to the Employee for reason of Financial Hardship
shall not exceed the amount of Employer contributions made to the Account
pursuant to a salary reduction agreement with the Employee, excluding earnings
thereon.

5.3 Method of Distribution. Subject to the limitations of this Article
5, the Employee may elect to have distribution of the assets of the Account made
in one or a combination of the following ways:

(a) lump-sum payment; or

(b) monthly, quarterly or annual installment payments
over a period certain not to exceed the life
expectancy of the Employee or the joint and last
survivor life expectancy of the Employee and his or
her Beneficiary in a manner that satisfies the
minimum distribution requirements of Article 5.4.

If no election of the method of distribution is made by the Employee within 30
days of receipt by the Custodian of the written request for distribution
referred to in Article 5.1, the Custodian shall make such distribution to the
Employee in a lump-sum payment of cash.

5.4 Minimum Distribution Requirements Prior to Death of Employee.

(a) Commencement of Distributions. Notwithstanding any provision
-----------------------------
of this Agreement to the contrary, distribution of the
Account shall commence no later than the "Required Beginning
Date". For any Employee who attained age 70-1/2 after
December 31, 1996 or before January 1, 1988, the Required
Beginning Date is the April 1 following the calendar year in
which the Employee attains age 70-1/2 or terminates
employment, whichever is the later. For any Employee who
attained age 70-1/2 in 1988 and had not retired by January 1,
1989, the Required Beginning Date is April 1, 1990. For any
other Employee who attained age 70 and 1/2 after December 31,
1987 and before January 1, 1997, the Required Beginning Date
is the April 1 following the calendar year in which the
Employee attains age 70-1/2 regardless of whether the Employee
has then retired. Notwithstanding the preceding paragraph,
effective January 1, 1997, the Required Beginning Date for an
Employee (other than an Employee who is a five percent owner,
as defined in Section 416 of the Code, of the Employer with
respect to the year in which the Employee attains age 70-1/2)
is the April 1 following the calendar year in which the
Employee attains age 70-1/2 or retires from the Employer,
whichever is later. [If an Employee is still employed by the

<PAGE>

Employer after January 1, 1997, and he is receiving
required distributions in accordance with the
preceding paragraph but would not be required to
receive distributions under the preceding sentence,
the Employee may file an election with the Custodian
to cease minimum required distributions under the
preceding paragraph; and such Employee may resume
distributions by filing a written request with the
Custodian under Section 5.1 above at the time
required by the preceding sentence. In the case of an
Account which contains Direct Contributions, the
election in the preceding sentence will apply only if
the Employer consents thereto in a written consent
filed with the Custodian.]

(b) Minimum Amounts to be Distributed. The minimum amount
distributed to the Employee for each taxable year,
beginning no later than the Required Beginning Date
under subsection (a) above, must equal or exceed the
minimum distribution required under Sections
401(a)(9) and 403(b)(10) of the Code and must meet
the incidental death benefit requirement of the
regulations under Section 401(a)(9).

5.5 Distribution Upon Death of Employee. In the event the Employee dies
prior to the complete distribution of the assets of the Account, all assets
remaining in the Account shall be distributed to the Employee's Beneficiary in a
lump-sum payment or in monthly, quarterly or annual installment payments over a
specified period as selected in writing by the Beneficiary in accordance with
the following rules:

(a) Where Distribution Had Already Commenced. If
distribution to the Employee had already commenced
and the Employee died after the Employee's Required
Beginning Date, the assets of the Account shall be
distributed to the Beneficiary at least as rapidly as
under the method of distribution in effect prior to
the Employee's death.

(b) Five-Year Rule. If the Employee died before the
Employee's Required Beginning Date, the assets of the
Account shall be distributed to the Beneficiary by
December 31 of the calendar year which contains the
fifth anniversary of the death of the Employee.

(c) Exception for Distributions Over Life Expectancy.
------------------------------------------------
Notwithstanding subsection (b) above, the assets of the
Account may be distributed to the Beneficiary in
installment payments over a period certain not exceeding
the Beneficiary's life expectancy, provided such
distribution commences by
December 31 of the calendar year immediately following the
year of the Employee's death or, if the Beneficiary is the
surviving spouse of the Employee, by December 31 of the
later of (1) the calendar year immediately following the
calendar year in which the Employee died or (2) the
calendar year in which the Employee would have attained
age 70- 1/2.

In determining the minimum amounts required to be distributed under Section 5.4
or this Section 5.5, life expectancies of the Employee and/or the Employee's
spouse may be recalculated annually in accordance with applicable regulations,
but only if the Employee and/or the Employee's spouse specifically so provide in
writing; life expectancies of any person other than the Employee or the
Employee's spouse will not be recalculated. Notwithstanding any provision of
this Agreement to the contrary, to the extent permitted under regulation, ruling

<PAGE>

procedures or notice of the Internal Revenue Service, the minimum distribution
calculated in accordance with Code sections 403(b)(10) and 401(a)(9) may be
taken from any 403(b) annuity or account of the Employee. The Custodian will
have no responsibility for determining the required time or amount of any
distribution required under such Code sections, but will make distributions only
in accordance with the proper directions by the Account Holder; the Custodian
will have no liability for not making a distribution in the absence of such
directions and may assume that the Account Holder is satisfying any applicable
minimum distribution requirement from another 403(b) annuity or custodial
account. If the Beneficiary dies while receiving payments from the Account, all
remaining assets in the Account shall be distributed as soon as practicable to
the estate of the Beneficiary.

5.6 Designation of Beneficiary. The Employee may from time to time
designate any person, persons or entity as the Beneficiary who shall receive any
undistributed assets held in the Account at the time of the Employee's death.
Any Beneficiary designation by the Employee shall be made on a form prescribed
by the Custodian (or in another written designation acceptable to the
Custodian), and shall be effective only when filed with the Custodian during the
lifetime of the Employee. If the Employee fails to designate a Beneficiary in
the manner provided above, or if the Beneficiary designated by the Employee
predeceases the Employee, the assets of the Account shall be distributed upon
the death of the Employee in the following order of priority: first to the
employee's surviving spouse, if any, and second, to the estate of the Employee.
Notwithstanding the foregoing, if this Agreement constitutes part of an
"employee benefit plan" under ERISA, then the Beneficiary of a married Employee
must be the spouse of the Employee, unless the spouse of the Employee consents
in writing to designation of a different Beneficiary and such consent
acknowledges the effect of the designation, specifies the nonspouse Beneficiary
designated, and is witnessed by a notary public. Furthermore, such a designation
of a nonspouse Beneficiary may be changed to a different nonspouse Beneficiary
only if the spouse of the Employee provides a new consent that meets all
requirements of the preceding sentence.

5.7 Distributions Pursuant to Qualified Domestic Relations Orders or
Other Court Orders. In the case of an Account that is part of an "employee
pension benefit plan" (as defined in ERISA), nothing in this Agreement shall
prohibit distribution to any person in accordance with the terms of a "qualified
domestic relations order" as defined in Section 206(d) of ERISA. The Custodian
will make payments in accordance with an apparently valid order or judgment of a
court binding on the Custodian. The Account Holder will be responsible to direct
the Custodian whether or not to contest, defend against or appeal any such order
or judgment (subject to the last sentence of Section 6.5).

5.8 Payments to Incompetent Persons. If an amount is payable to a
person believed by the Custodian to be a minor or otherwise legally incompetent,
the Custodian may make such payment to the parent, a legal guardian, committee
or other legal representative (however or wherever appointed), or any person
having control or custody of such person, and any such payment will fully
discharge the Custodian to the extent of the payment.

5.9 Direct Rollovers. This Article 5.9 applies to distributions made on
or after January 1, 1993. Notwithstanding any provision of this Agreement to the
contrary that would otherwise limit a distributee's election under this section,
a distributee may elect, at the time and in the manner prescribed by the
Custodian and fund transfer agent, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover. For the purpose of this section, the following
definitions apply:

<PAGE>

(a) Eligible rollover distribution: An eligible rollover is any
distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one
of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint
life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten years
or more; any distribution to the extent such distribution is
required to comply with the minimum distribution and
incidental death benefit requirements of section 401(a)(9) and
403(b)(10) of the Code; and the portion of any distribution
that is not includible in gross income. An eligible rollover
distribution also does not include any other amounts that may
be excluded under regulations, procedures, notices, or rulings
interpreting the term eligible rollover distribution under
sections 401(a)(31), 402, or 403(b) of the Code.

(b) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of
the Code, an individual retirement annuity described in
section 408(b) of the Code, or another 403(b) annuity or
403(b)(7) custodial account, that accepts the distributee's
eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account
or individual retirement annuity.

(c) Distributee: A distributee includes an employee or
former employee. In addition, the employee's or
former employee's surviving spouse and the employee's
or former employee's spouse or former spouse who is
the alternate payee under a qualified domestic
relations order, as defined in section 414(p) of the
Code, are distributees with regard to the interest of
the spouse or former spouse.

(d) Direct rollover: A direct rollover is a payment by
the plan to the eligible retirement plan specified by
the distributee.

(e) The Custodian and fund transfer agent may prescribe reasonable
procedures for the election of direct rollovers under this
section, including, but not limited to, requirements that the
distributee provide the Custodian with adequate information,
including, but not limited to: the name of the eligible
retirement plan to which the rollover is to be made; a
representation that the recipient plan is an individual
retirement plan or a 403(b) annuity or 403(b)(7) custodial
account, as appropriate; acknowledgment from the recipient
plan that it will accept the direct rollover; and any other
information necessary to make the direct rollover.

<PAGE>

ARTICLE VI

RESPONSIBILITIES AND DUTIES OF CUSTODIAN

6.1 Asset Retention. The Custodian shall hold all contributions to the
Account which are received by it subject to the terms and conditions of this
Agreement and for the purposes set forth herein. The Custodian shall be
responsible only for such assets as shall actually be received by it.

6.2 Records and Reports. The Custodian shall file such reports with the
Internal Revenue Service as may be required to be filed by the Custodian (not
including such reports as may be required to be filed by the Employer or, if
applicable, the plan administrator) under Treasury Regulations. The Custodian,
the Employer, Employee and Beneficiary shall furnish to one another such
information relevant to the Account as may be required in connection with such
reports. The Custodian will also furnish the Employee (or Beneficiary if the
Employee is deceased) with annual or more frequent reports showing all
transactions in the Account during the period covered by the report and the
number of shares of each Fund held in the Account at the end of the period
covered by such report. Unless the Employee (or Beneficiary, where applicable)
sends the Custodian written objection to any such report within 60 days after
its receipt, the Employee (or Beneficiary, where applicable) shall be deemed to
have approved such report, and in such case the Custodian shall be forever
released and discharged from all liability and accountability to anyone with
respect to all matters and things included therein. The Custodian may seek a
judicial settlement of its accounts. In any such proceeding, the only necessary
party thereto in addition to the Custodian shall be the Employee.

6.3 Limitations on Responsibilities and Duties.

(a) The Custodian shall not be responsible in any way for the
timing, amount or collection of contributions provided for
under this Agreement, the selection of the investments for the
Account, the timing, amount or purpose or propriety of any
distribution made pursuant to Article 5 hereof, or the tax
consequences of any such transaction to the Employee or
Beneficiary, or any other action taken at the direction of the
Employee (or Beneficiary or Employer, where applicable). The
Custodian shall not be obliged to take any action whatsoever
with respect to the Account except upon receipt of directions
in a form acceptable to the Custodian from the Employee (or
Beneficiary or Employer, where applicable). The Custodian
shall be under no obligation to determine the accuracy or
propriety of any such directions and shall be fully protected
in acting in accordance therewith. The Custodian will be
fully protected in acting in reliance upon any document, order
or other direction believed by it to be genuine and properly
given. The Custodian will have no responsibility if the
Custodian does not act in the absence of proper instructions,
or if the Custodian believes any document, order or other
direction is not genuine or properly given, or on the basis of
any incomplete or ambiguous document, order or other direction
until such incompleteness or ambiguity is resolved to the
Custodian's satisfaction.

<PAGE>

(b) The Custodian is an agent appointed by the Company to
perform solely the duties assigned to it under the
Agreement, it being acknowledged that certain of such
duties may be performed by the Custodian in any event
pursuant to one or more other contractual
arrangements or relationships. The Custodian shall
not be deemed to be a fiduciary under ERISA in
carrying out its duties.

(c) The Employer shall be solely responsible for assuring
compliance at all times with the nondiscrimination
requirements of Code section 403(b)(12) (whether or not the
Account holds any Direct Contributions) and the Custodian
shall not be responsible in any way for such compliance. If
the Account holds any Direct Contributions, the Employer shall
be solely responsible for compliance with all applicable
requirements of the Code (including the non-discrimination
requirements of Code Section 403(b)(12) applicable to such
Direct Contributions) and ERISA.

(d) The Custodian will have no liability to the Account Holder
for transferring any amount to a state authority in accordance with any law
relating to escheat or abandoned or unclaimed property.

(e) It is hereby agreed that, subject to the provisions
of applicable law, no person other than the Account
Holder may institute or maintain any action or
proceeding against the Custodian.

6.4 Indemnification of Custodian. The Account Holder and the successors
of the Account Holder, including any executor or administrator of the Account
Holder, shall, to the fullest extent permitted by law, at all times fully
indemnify and save harmless the Custodian, its successors and assigns from any
and all claims, actions, or liabilities arising from investments or
distributions made or actions taken at the direction of the Account Holder, and
from any and all other liability whatsoever (including without limitation all
reasonable expenses incurred in defending against or settlement of such claims,
actions or liabilities) which may arise in connection with this Agreement or the
Account, except liability arising from the gross negligence or willful
misconduct of the Custodian.

6.5 Liability of Custodian. The Custodian's liability under this
Agreement and matters which it contemplates shall be limited to matters arising
from the Custodian's gross negligence or willful misconduct. The Custodian shall
be entitled to rely conclusively upon, and shall be fully protected in any
action or nonaction taken in reliance upon, any written notices or other
communications or instruments believed by the Custodian to be genuine and to
have been properly executed. The Custodian shall not under any circumstances be
responsible for the timing, purpose, or propriety of any contribution or of any
distribution made hereunder, nor shall the Custodian incur any liability or
responsibility for any tax imposed on account of any such contribution or
distribution. The Custodian shall not be obligated or expected to commence or
defend any legal action or proceeding in connection with this Agreement unless
agreed upon by the Custodian and Account Holder, and unless fully indemnified
for so doing to the satisfaction of the Custodian.

ARTICLE VII

FEES AND EXPENSES OF THE CUSTODIAN

<PAGE>

7.1 Compensation of Custodian. In consideration for its services
hereunder, the Custodian shall be entitled to receive the applicable fees
specified in the Application. The Custodian may substitute a revised fee
schedule from time to time. The Custodian shall be entitled to such reasonable
additional fees as it may from time to time determine for services required of
it and not clearly identified on the fee schedule. The Employee acknowledges
that the Custodian's ability to earn income on amounts held in non-interest
bearing accounts has been taken into consideration in establishing the
Custodian's fees. The Employee agrees that the Custodian shall be entitled to
retain any such income as a part of its agreed compensation hereunder, and such
income shall not be or become a part of the Fund.

7.2 Charges Upon the Account. Any income taxes or other taxes of any
kind whatsoever that may be levied or assessed upon or in respect of the Account
(including any transfer taxes incurred in connection with the investment and
reinvestment of Account assets), expenses, fees and administrative costs
incurred by the Custodian in the performance of its duties (including fees for
legal services rendered to the Custodian), and the Custodian's compensation as
determined under Article 7.1 shall constitute a charge upon the assets of the
Account. At the Custodian's option, such fees, taxes or expenses shall be paid
from the Account or by the Account Holder. The Custodian may redeem Fund shares
and use the proceeds of redemption to pay such fees, taxes or expenses, and the
Custodian will have no liability for loss of income or appreciation as a result
of the Custodian's selection of Fund shares to be redeemed under this sentence.

ARTICLE VIII

RESIGNATION OR REMOVAL OF CUSTODIAN

8.1 Resignation or Removal. The Custodian may resign at any time by
written notice to the Company which shall be effective 30 days after delivery
thereof. The Company shall appoint a successor Custodian who shall accept such
appointment in a writing provided to the Custodian and Account Holder within
such 30-day period. The Custodian may be removed by the Company at any time upon
30 days written notice to the Custodian, provided that the Company designates a
successor Custodian that accepts such appointment by a writing provided to the
Account Holder and the Custodian within such 30-day period. Upon such
resignation or removal, the Custodian shall transfer and deliver all assets of
the Account and copies of all records relative thereto to the successor
Custodian appointed by the Company, provided such successor Custodian has in
writing accepted this Agreement as it is or may be then amended. Notwithstanding
the foregoing, the Custodian is authorized to reserve such sum of money as it
may deem advisable for payment of all of its fees, compensation, costs and
expenses, or for payment of any other liability constituting a charge on or
against the assets of the Account or on or against the Custodian, and where
necessary may liquidate shares in the Account for such payments in accordance
with the last sentence of Section 7.2. Any balance of such reserve remaining
after the payment of all such items shall be paid over to the successor
Custodian.

8.2 Liability for Successor's Acts. Upon its resignation or removal,
the Custodian shall not be liable for the acts or omissions of any successor
Custodian. Upon the transfer of assets of the Account to a successor Custodian,
the resigning or removed Custodian shall be relieved of all further liability
with respect to this Agreement, the Account and the assets thereof.

ARTICLE IX

<PAGE>

AMENDMENT AND TERMINATION

9.1 Amendment of Agreement.

(a) The Account Holder, Employer, and Custodian hereby
delegate to the Company the power to amend this
Agreement, including any retroactive amendment
necessary for the purpose of conforming the Agreement
to the requirements of the Code. The Company shall
deliver written notice of any such amendment to the
Account Holder, Custodian and any Employer who is
party to this Agreement.

(b) No amendment to this Agreement shall cause or permit:

any part of the assets of the Account to be used for, or
diverted to, purposes other than for the exclusive benefit of the
Employee or Beneficiary, except with regard to payment of the expenses
of the Custodian and the Company as authorized by the
provisions of this Agreement and except to the extent required by law; the
Employee to be deprived of any accrued benefits under this Agreement unless such
amendment is required for the purpose of conforming the Agreement to
the requirements of any law, government regulation or ruling;
or the imposition of any additional duties or obligations on
the Custodian without its written consent.

9.2 Termination of Agreement. This Agreement shall terminate when all
assets in the Account have been distributed or otherwise transferred out of the
Account. Upon completion of such distribution, the Custodian shall be released
from all further liability with respect to all amounts so paid to the extent
permitted by applicable law. However, the provisions of this Agreement
protecting the Custodian or limiting the liability of the Custodian, including
specifically but without implied limitation Section 6.4, will survive the
termination of this Agreement.

ARTICLE X

MISCELLANEOUS

10.1 Retirement Plan Provisions Shall Control. In the event
contributions are being made to the Account pursuant to any retirement plan or
program sponsored by the Employer, to the extent any provisions of this
Agreement are inconsistent with such retirement plan or program, the provisions
of the Employer's retirement plan or program shall control, provided:

(a) such provisions are not contrary to the rules and
regulations
under Section 403(b)(7) of the Code; and

(b) such provisions do not impose any additional
responsibilities or duties on the Custodian without
its prior written consent. The Employer shall be
responsible for delivering the most recent copy of
any such retirement plan or program to the Custodian.

10.2 ERISA Requirements. If this Agreement is determined to constitute
part of an "employee benefit plan" established or maintained by the Employer
subject to Title I of ERISA, then the Employer shall be solely responsible for
assuring such employee benefit plan complies at all times with the requirements
of Title I of ERISA. In such a case, the Employer (or a person designated by the
Employer) will be the "plan administrator" of such employee benefit plan for

<PAGE>

purposes of ERISA. Neither the Custodian nor the Company will be the "plan
administrator" of such employee benefit plan for purposes of ERISA.

10.3 Exclusive Benefit. The assets of the Account shall not be used
for, or diverted to, purposes other than for the exclusive benefit of the
Employee or his or her Beneficiary. The assets of the Account shall not be
subject to the claims of the creditors of the Employer.

10.4 Nonforfeitability and Nontransferability. The interest of the
Employee in the balance of the Account shall at all times be nonforfeitable and
nontransferable. All rights under this Agreement are enforceable solely by the
Employee or his or her Beneficiary, or any duly authorized representative of the
Employee or Beneficiary.

10.5 Nonalienation. The assets of the Account shall not be subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, attachment, garnishment, execution, or levy of any kind,
either voluntary or involuntary, except with regard to payment of expenses of
the Custodian as authorized by the provisions of the Agreement and except to the
extent required by law.

10.6 Notices. Any notice, accounting, or other communication which the
Custodian may give to the Employer or the Account Holder shall be deemed given
when mailed to the Employee at the latest address which has been furnished to
the Custodian. Any notice or other communication which the Employer or Account
Holder may give to the Custodian shall not become effective until actual receipt
of said notice by the Custodian.

10.7 Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of Missouri, to the extent not preempted by Federal
law. No provision of this Agreement shall be construed to conflict with any
provision of an Internal Revenue Service regulation, ruling, release, or other
order which affects, or could affect, the terms of this Agreement or its
compliance with the requirements of Section 403(b)(7) of the Code.

The Account Holder (and, if applicable, the Employer) agree that any
legal action brought against the Custodian by any other party must be brought in
a state or federal court located in the judicial district in which the principal
offices of the Custodian are located.

Bull & Bear Funds I, Inc.
By-laws As Amended December 11, 1997

AMENDED BY-LAWS

BULL & BEAR FUNDS I, INC.

A MARYLAND CORPORATION

DECEMBER 11, 1997

<PAGE>

Bull & Bear Funds I, Inc.
By-laws As Amended December 11, 1997

AMENDED BY-LAWS
TABLE OF CONTENTS
PAGE

ARTICLE I - NAME OF CORPORATION, LOCATION OF OFFICES AND SEAL............... 1
Section 1.01. Name................................................ 1
Section 1.02. Principal Offices................................... 1
Section 1.03. Seal................................................ 1

ARTICLE II - STOCKHOLDERS................................................... 1
Section 2.01. Annual Meetings..................................... 1
Section 2.02. Special Meetings.................................... 1
Section 2.03. Notice of Meetings.................................. 1
Section 2.04. Quorum and Adjournment of Meetings.................. 1
Section 2.05. Voting and Inspectors............................... 1
Section 2.06. Validity of Proxies................................. 2
Section 2.07. Stock Ledger and List of Stockholders............... 2
Section 2.08. Action Without Meeting.............................. 2

ARTICLE III - BOARD OF DIRECTORS............................................ 2
Section 3.01. General Powers...................................... 2
Section 3.02. Power to Issue and Sell Stock....................... 2
Section 3.03. Power to Declare Dividends.......................... 2
Section 3.04. Number and Term of Directors........................ 3
Section 3.05. Vacancies and Newly Created Directorships........... 3
Section 3.06. Removal............................................. 3
Section 3.07. Regular Meetings.................................... 3
Section 3.08. Special Meetings.................................... 3
Section 3.09. Waiver of Notice.................................... 3
Section 3.10. Quorum and Voting................................... 3
Section 3.11. Action Without a Meeting............................ 4
Section 3.12. Compensation of Directors........................... 4
ARTICLE IV - COMMITTEES..................................................... 4
Section 4.01. Organization........................................ 4
Section 4.02. Powers of the Executive Committee................... 4
Section 4.03. Powers of Other Committees of the Board of Directors 4
Section 4.04. Proceedings and Quorum.............................. 4
Section 4.05. Other Committees.................................... 4

ARTICLE V - OFFICERS........................................................ 4
Section 5.01. Officers............................................ 4
Section 5.02. Election, Tenure and Qualifications................. 4
Section 5.03. Vacancies and Newly Created Offices................. 4
Section 5.04. Removal and Resignation............................. 5
Section 5.05. Chairman of the Board............................... 5
Section 5.06. Vice Chairman of the Board.......................... 5
Section 5.07. President, Co-President............................. 5
Section 5.08. Vice President...................................... 5
Section 5.09. Treasurer and Assistant Treasurers.................. 5
Section 5.10. Secretary and Assistant Secretaries................. 5
Section 5.11. Subordinate Officers................................ 5
Section 5.12. Remuneration........................................ 5
Section 5.13. Surety Bonds........................................ 6

ARTICLE VI - EXECUTION OF INSTRUMENTS, VOTING OF SECURITIES................. 6
Section 6.01. General............................................. 6
Section 6.02. Checks, Notes, Drafts, Etc.......................... 6
Section 6.03. Voting of Securities................................ 6

ARTICLE VII - CAPITAL STOCK................................................. 6
Section 7.01. Certificates of Stock............................... 6
Section 7.02. Transfer of Shares.................................. 6
Section 7.03. Transfer Agents and Registrars...................... 6
Section 7.04. Fixing of Record Date............................... 7
Section 7.05. Lost, Stolen or Destroyed Certificates.............. 7

ARTICLE VIII - CONFLICT OF INTEREST TRANSACTIONS............................ 7
Section 8.01. Validity of Contract or Transactions................ 7
Section 8.02. Dealings............................................ 7

<PAGE>

Bull & Bear Funds I, Inc.
By-laws As Amended December 11, 1997

ARTICLE IX - FISCAL YEAR AND ACCOUNTANT..................................... 7
Section 9.01. Fiscal Year......................................... 7
Section 9.02. Accountant.......................................... 7

ARTICLE X - CUSTODY OF SECURITIES........................................... 8
Section 10.01. Employment of a Custodian.......................... 8
Section 10.02. Termination of Custodian Agreement................. 8
Section 10.03. Provisions of Custodian Contract................... 8
Section 10.04. Other Arrangements................................. 8

ARTICLE XI - INDEMNIFICATION AND INSURANCE.................................. 8
Section 11.01. Indemnification of Officers, Directors,
Employees and Agents............................... 8
Section 11.02. Insurance of Officers, Directors,
Employees and Agents............................... 9
Section 11.03. Non-exclusivity.................................... 9
Section 11.04. Amendment.......................................... 9

ARTICLE XII - AMENDMENTS.................................................... 9
Section 12.01. General............................................ 9
Section 12.02. By Stockholders Only............................... 9

<PAGE>

Bull & Bear Funds I, Inc.
By-laws As Amended December 11, 1997

AMENDED BY-LAWS
OF

BULL & BEAR FUNDS I, INC.

(A MARYLAND CORPORATION)

ARTICLE I
NAME OF CORPORATION, LOCATION OF
OFFICES AND SEAL

Section 1.01. Name. The name of the Corporation is Bull & Bear Funds I, Inc.

Section 1.02. Principal Offices. The principal office of the Corporation in the
State of Maryland shall be located in Baltimore, Maryland. The Corporation may,
in addition, establish and maintain such other offices and places of business as
the board of directors may, from time to time, determine.

Section 1.03. Seal. The corporate seal of the Corporation shall consist of two
(2) concentric circles, between which shall be the name of the Corporation, and
in the center shall be inscribed the year of its incorporation, and the words
"Corporate Seal." The form of the seal shall be subject to alteration by the
board of directors and the seal may be used by causing it or a facsimile to be
impressed or affixed or printed or otherwise reproduced. Any officer or director
of the Corporation shall have authority to affix the corporate seal of the
Corporation to any document requiring the same.

ARTICLE II
STOCKHOLDERS

Section 2.01. Annual Meetings. There shall be no stockholders' meetings for
the election of directors and the transaction of other proper business except as
required by law or as hereinafter provided.

Section 2.02. Special Meetings. Special meetings of stockholders may be called
at any time by the chairman of the board or the president or a co-president and
shall be held at such time and place as may be stated in the notice of the
meeting. The secretary shall call a special meeting of the stockholders on the
written request of stockholders entitled to cast at least a majority of all the
votes entitled to be cast at the meeting. Such request shall state the purpose
of such meeting and the matters proposed to be acted on thereat, and no other
business shall be transacted at any such special meeting. The secretary shall
inform such stockholders of the reasonably estimated costs of preparing and
mailing the notice of the meeting, and upon payment to the Corporation of such
costs, the secretary shall give not less than ten nor more than 90 days' notice
of the time, place and purpose of the meeting in the manner provided in Section
2.03 of this Article II.

Section 2.03. Notice of Meetings. The secretary shall cause notice of the place,
date and hour and, in the case of a special meeting or as otherwise required by
law, the purpose or purposes for which the meeting is called, to be served
personally or to be mailed, postage prepaid, not less than 10 nor more than 90
days before the date of the meeting, to each stockholder entitled to vote at
such meeting at his address as it appears on the records of the Corporation at
the time of such mailing. Notice shall be deemed to be given when deposited in
the United States mail addressed to the stockholders as aforesaid.

Notice of any stockholders' meeting need not be given to any stockholder who
shall sign a written waiver of such notice whether before or after the time of
such meeting, which waiver shall be filed with the records of such meeting, or
to any stockholder who is present at such meeting in person or by proxy. Notice
of adjournment of a stockholders' meeting to another time or place need not be
given if such time and place are announced at the meeting.

Irregularities in the notice of any meeting to, or the nonreceipt of any such
notice by, any of the stockholders shall not invalidate any action otherwise
properly taken by or at any such meeting.

Section 2.04. Quorum and Adjournment of Meetings. The presence at any
stockholders' meeting, in person or by proxy, of stockholders entitled to cast
one-third of all votes entitled to be cast thereat shall be necessary and
sufficient to constitute a quorum for the transaction of business, provided that
with respect to any matter to be voted upon separately by any Series (as defined
in the Articles of Incorporation) or class of shares, a quorum shall consist of
the holders of one-third of the shares of that Series or class outstanding and
entitled to vote on the matter. In the absence of a quorum, the stockholders
present in person or by proxy or, if no stockholder entitled to vote is present
in person or by proxy, any officer present entitled to preside or act as
secretary of such meeting may adjourn the meeting without determining the date
of the new meeting or from time to time without further notice to a date not
more than 120 days after the original record date. Any business that might have
been transacted at the meeting originally called may be transacted at any such
adjourned meeting at which a quorum is present.

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<PAGE>

Bull & Bear Funds I, Inc.
By-laws As Amended December 11, 1997

Section 2.05. Voting and Inspectors. At every stockholders' meeting, each
stockholder shall be entitled to one vote for each share and a fractional vote
for each fraction of a share of stock of the Corporation validly issued and
outstanding and standing in his name on the books of the Corporation on the
record date fixed in accordance with Section 7.04 hereof, either in person or by
proxy appointed by instrument in writing subscribed by such stockholder or his
duly authorized attorney, except that no shares held by the Corporation shall be
entitled to a vote; provided, however, that (a) as to any matter with respect to
which a separate vote of any series is required by the Investment Company Act of
1940, as amended, or by the Maryland General Corporation Law, such requirement
as to a separate vote by that series shall apply; (b) in the event that the
separate vote requirements referred to in (a) above apply with respect to one or
more series, then, subject to (c) below, the shares of all other such one or
more series shall vote as a single series; and (c) as to any matter which
affects the interest of only a particular series, only the holders of shares of
the one or more affected series shall be entitled to vote.

If no record date has been fixed, the record date for the determination of
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be the later of the close of business on the day on which notice of the meeting
is mailed or the 30th day before the meeting, or, if notice is waived by all
stockholders, at the close of business on the 11th day preceding the day on
which the meeting is held.

Except as otherwise specifically provided in the Articles of Incorporation or
these By-laws or as required by provisions of the Investment Company Act of
1940, as amended, all matters shall be decided by a vote of the majority of the
votes validly cast at a meeting at which a quorum is present. The vote upon any
question shall be by ballot whenever requested by any person entitled to vote,
but, unless such a request is made, voting may be conducted in any way approved
by the meeting.

At any meeting at which there is an election of directors, the chairman of the
meeting may appoint two inspectors of election who shall first subscribe an oath
or affirmation to execute faithfully the duties of inspectors at such election
with strict impartiality and according to the best of their ability, and shall,
after the election, make a certificate of the result of the vote taken. No
candidate for the office of director shall be appointed as an inspector.

Section 2.06. Validity of Proxies. The right to vote by proxy shall exist only
if the instrument authorizing such proxy to act shall have been signed by the
stockholder or by his duly authorized attorney. Unless a proxy provides
otherwise, it shall not be valid more than 11 months after its date. All proxies
shall be delivered to the secretary of the Corporation or to the person acting
as secretary of the meeting before being voted, who shall decide all questions
concerning qualification of voters, the validity of proxies, and the acceptance
or rejection of votes. If inspectors of election have been appointed by the
chairman of the meeting, such inspectors shall decide all such questions. A
proxy with respect to stock held in the name of two or more persons shall be
valid if executed by one of them unless at or prior to exercise of such proxy
the Corporation receives from any one of them a specific written notice to the
contrary and a copy of the instrument or order which so provides. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise.

Section 2.07. Stock Ledger and List of Stockholders. It shall be the duty of the
secretary or assistant secretary of the Corporation to cause an original or
duplicate stock ledger containing the names and addresses of all the
stockholders and the number of shares held by them, respectively, to be
maintained at the office of the Corporation's transfer agent. Such stock ledger
may be in written form or any other form capable of being converted into written
form within a reasonable time for visual inspection. Any one or more persons,
each of whom has been a stockholder of record of the Corporation for more than
six months next preceding such request, who owns in the aggregate five percent
or more of the outstanding capital stock of the Corporation, may submit (unless
the Corporation at the time of the request maintains a duplicate stock ledger at
its principal office in Maryland) a written request to any officer of the
Corporation or its resident agent in Maryland for a list of the stockholders of
the Corporation. Within 20 days after such a request, there shall be prepared
and filed at the Corporation's principal office in Maryland a list containing
the names and addresses of all stockholders of the Corporation and the number of
shares of each class held by each stockholder, certified as correct by an
officer of the Corporation, by its stock transfer agent, or by its registrar.

Section 2.08. Action Without Meeting. Any action required or permitted to be
taken by stockholders at a meeting of stockholders may be taken without a
meeting if (a) all stockholders entitled to vote on the matter consent to the
action in writing, (b) all stockholders entitled to notice of the meeting but
not entitled to vote at it sign a written waiver of any right to dissent, and
(c) the consents and waivers are filed with the records of the meetings of
stockholders. Such consent shall be treated for all purposes as a vote at the
meeting.

ARTICLE III
BOARD OF DIRECTORS

Section 3.01. General Powers. Except as otherwise provided by operation of law,
by the Articles of Incorporation, or by these By-laws, the property, business
and affairs of the Corporation shall be managed under the direction of and all
the powers of the Corporation shall be exercised by or under authority of its
board of directors.

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Bull & Bear Funds I, Inc.
By-laws As Amended December 11, 1997

Section 3.02. Power to Issue and Sell Stock. The board of directors may from
time to time issue and sell or cause to be issued and sold any of the
Corporation's authorized shares to such persons and for such consideration as
the board of directors shall deem advisable, subject to the provisions of the
Articles of Incorporation.

Section 3.03. Power to Declare Dividends. The board of directors, from time to
time as they may deem advisable, may declare and pay dividends in stock, cash or
other property of the Corporation, out of any source available for dividends, to
the stockholders according to their respective rights and interests in
accordance with the provisions of the Articles of Incorporation. The board of
directors may prescribe from time to time that dividends declared may be payable
at the election of any of the stockholders (exercisable before or after the
declaration of the dividend), either in cash or in shares of the Corporation,
provided that the sum of the cash dividend actually paid to any stockholder and
the asset value of the shares received (determined as of such time as the board
of directors shall have prescribed, pursuant to the Articles of Incorporation,
with respect to shares sold on the date of such election) shall not exceed the
full amount of cash to which the stockholder would be entitled if he elected to
receive only cash. The board of directors shall cause to be accompanied by a
written statement any dividend payment wholly or partly from any source other
than:

(a) the Corporation's accumulated undistributed net income (determined
in accordance with good accounting practice and the rules and
regulations of the Securities and Exchange Commission then in effect)
and not including profits or losses realized upon the sale of
securities or other properties; or

(b) the Corporation's net income so determined for the current or
preceding fiscal year.

Such statement shall adequately disclose the source or sources of such payment
and the basis of calculation, and shall be in such form as the Securities and
Exchange Commission may prescribe.

Section 3.04. Number and Term of Directors. Except for the initial board of
directors, the board of directors shall consist of not fewer than three nor more
than fifteen directors, as specified by a resolution of a majority of the entire
board of directors and at least one member of the board of directors shall be a
person who is not an "interested person" of the Corporation, as that term is
defined in the Investment Company Act of 1940, as amended. All other directors
may be interested persons of the Corporation if the requirements of Section
10(d) of the Investment Company Act of 1940, as amended, are met by the
Corporation and its investment manager. Each director shall hold office until
his successor is elected and qualified or until his earlier death, resignation
or removal.

All acts done at any meeting of the directors or by any person acting as a
director, so long as his successor shall not have been duly elected or
appointed, shall, notwithstanding that it be afterwards discovered that there
was some defect in the election of the directors or of such person acting as a
director or that they or any of them were disqualified, be as valid as if the
directors or such other person, as the case may be, had been duly elected and
were or was qualified to be directors or a director of the Corporation.

Directors need not be stockholders of the Corporation.

Section 3.05. Vacancies and Newly Created Directorships. If any vacancies shall
occur in the board of directors by reason of death, resignation, removal or
otherwise, or if the authorized number of directors shall be increased, the
directors then in office shall continue to act, and such vacancies (if not
previously filled by the stockholders) may be filled by a majority of the
directors then in office, although less than a quorum, except that a newly
created directorship may be filled only by a majority vote of the entire board
of directors; provided, however, that immediately after filling such vacancy, at
least two-thirds (2/3) of the directors then holding office shall have been
elected to such office by the stockholders of the Corporation. In the event that
at any time, other than the time preceding the first annual stockholders'
meeting, less than a majority of the directors of the Corporation holding office
at that time were elected by the stockholders, a meeting of the stockholders
shall be held promptly and in any event within 60 days for the purpose of
electing directors to fill any existing vacancies in the board of directors,
unless the Securities and Exchange Commission shall by order extend such period.

Section 3.06. Removal. At any stockholders' meeting duly called, provided a
quorum is present, the stockholders may remove any director from office (either
with or without cause) by the affirmative vote of a majority of all votes
represented at the meeting, and at the same meeting a duly qualified successor
or successors may be elected to fill any resulting vacancies by a plurality of
the votes validly cast.

Section 3.07. Regular Meetings. The meeting of the board of directors for
choosing officers and transacting other proper business, and all other meetings,
shall be held at such time and place, within or outside the state of Maryland,
as the board may determine and as provided by resolution. Except as otherwise
provided in the Investment Company Act of 1940, as amended, notice of such
meetings need not be given, following the annual meeting of stockholders, if
any, provided that notice of any change in the time or place of such meetings
shall be sent promptly to each director not present at the meeting at which such
change was made, in the manner provided for notice of special meetings. Except
as otherwise provided under the Investment Company Act of 1940, as amended,
members of the board of directors or any committee designated thereby may
participate in a meeting of such board or committee by means of a conference
telephone or similar communications equipment that allows

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<PAGE>

Bull & Bear Funds I, Inc.
By-laws As Amended December 11, 1997

all persons participating in the meeting to hear each other at the same time;
and participation by such means shall constitute presence in person at a
meeting.

Section 3.08. Special Meetings. Special meetings of the board of directors shall
be held whenever called by the chairman of the board or the president or a
co-president (or, in the absence or disability of the chairman of the board or
the president or a co-president, by any officer or director, as they so
designate) at the time and place (within or outside of the State of Maryland)
specified in the respective notice or waivers of notice of such meetings. At
least three days before the day on which a special meeting is to be held, notice
of special meetings, stating the time and place, shall be (a) mailed to each
director at his residence or regular place of business or (b) delivered to him
personally or transmitted to him by telegraph, telefax, telex, cable or
wireless.

Section 3.09. Waiver of Notice. No notice of any meeting need be given to any
director who is present at the meeting or who waives notice of such meeting in
writing (which waiver shall be filed with the records of such meeting), either
before or after the time of the meeting.

Section 3.10. Quorum and Voting. At all meetings of the board of directors, the
presence of one-half of the number of directors then in office shall constitute
a quorum for the transaction of business, provided that there shall be present
at least two directors. In the absence of a quorum, a majority of the directors
present may adjourn the meeting, from time to time, until a quorum shall be
present. The action of a majority of the directors present at a meeting at which
a quorum is present shall be the action of the board of directors, unless
concurrence of a greater proportion is required for such action by law, by the
Articles of Incorporation or by these By-laws.

Section 3.11. Action Without a Meeting. Except as otherwise provided in the
Investment Company Act of 1940, as amended, any action required or permitted to
be taken at any meeting of the board of directors or of any committee thereof
may be taken without a meeting if a written consent to such action is signed by
all members of the board or of such committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the board or
committee.

Section 3.12. Compensation of Directors. Directors may receive such
compensation for their services as may from time to time be determined by
resolution of the board of directors.

ARTICLE IV
COMMITTEES

Section 4.01. Organization. By resolution adopted by the board of directors, the
board may designate one or more committees of the board of directors, including
an Executive Committee, each consisting of at least two directors. Each member
of a committee shall be a director and shall hold committee membership at the
pleasure of the board. The chairman of the board, if any, shall be a member of
the Executive Committee. The board of directors shall have the power at any time
to change the members of such committees and to fill vacancies in the
committees.

Section 4.02. Powers of the Executive Committee. Unless otherwise provided by
resolution of the board of directors, when the board of directors is not in
session the Executive Committee shall have and may exercise all powers of the
board of directors in the management of the business and affairs of the
Corporation that may lawfully be exercised by an Executive Committee except the
power to declare a dividend or distribution on stock, authorize the issuance of
stock, recommend to stockholders any action requiring stockholders' approval,
amend these By-laws, approve any merger or share exchange which does not require
stockholder approval or approve or terminate any contract with an "investment
adviser" or "principal underwriter," as those terms are defined in the
Investment Company Act of 1940, as amended, or to take any other action required
by the Investment Company Act of 1940, as amended, to be taken by the board of
directors. Notwithstanding the above, such Executive Committee may make such
dividend calculations and payments as are consistent with applicable law,
including Maryland corporate law.

Section 4.03. Powers of Other Committees of the Board of Directors. To the
extent provided by resolution of the board, other committees of the board of
directors shall have and may exercise any of the powers that may lawfully be
granted to the Executive Committee.

Section 4.04. Proceedings and Quorum. In the absence of an appropriate
resolution of the board of directors, each committee may adopt such rules and
regulations governing its proceedings, quorum and manner of acting as it shall
deem proper and desirable, provided that a quorum shall not be less than two
directors. In the event any member of any committee is absent from any meeting,
the members thereof present at the meeting, whether or not they constitute a
quorum, may appoint a member of the board of directors to act in the place of
such absent member.

Section 4.05. Other Committees. The board of directors may appoint other
committees, each consisting of one or more persons, who need not be directors.
Each such committee shall have such powers and perform such duties as may be
assigned to it from time to time by the board of directors, but shall not
exercise any power which may lawfully be exercised only by the board of
directors or a committee thereof.

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ARTICLE V
OFFICERS

Section 5.01. Officers. The officers of the Corporation shall be a president or
co-presidents, a secretary, and a treasurer, and may include one or more vice
presidents (including executive and senior vice presidents), assistant
secretaries or assistant treasurers, and such other officers as may be appointed
in accordance with the provisions of Section 5.11 hereof. The board of directors
may, but shall not be required to, elect a chairman and vice chairman of the
board.

Section 5.02. Election, Tenure and Qualifications. The officers of the
Corporation (except those appointed pursuant to Section 5.11 hereof) shall be
elected by the board of directors at its first meeting or such subsequent
meetings as shall be held prior to its first annual meeting, and thereafter at
regular board meetings, as required by applicable law. If any officers are not
elected at any annual meeting, such officers may be elected at any subsequent
meetings of the board. Except as otherwise provided in this Article V, each
officer elected by the board of directors shall hold office until his or her
successor shall have been elected and qualified. Any person may hold one or more
offices of the Corporation except that no one person may serve concurrently as
both the president or a co-president and vice president. A person who holds more
than one office in the Corporation may not act in more than one capacity to
execute, acknowledge, or verify an instrument required by law to be executed,
acknowledged, or verified by more than one officer. The chairman of the board
shall be chosen from among the directors of the Corporation and may hold such
office only so long as he continues to be a director. No other officer need be a
director.

Section 5.03. Vacancies and Newly Created Offices. If any vacancy shall occur in
any office by reason of death, resignation, removal, disqualification or other
cause, or if any new office shall be created, such vacancies or newly created
offices may be filled by the chairman of the board at any meeting or, in the
case of any office created pursuant to Section 5.11 hereof, by any officer upon
whom such power shall have been conferred by the board of directors.

Section 5.04. Removal and Resignation. At any meeting called for such purpose,
the Executive Committee may remove any officer from office (either with or
without cause) by the affirmative vote, given at the meeting, of a majority of
the members of the Committee. Any officer may resign from office at any time by
delivering a written resignation to the board of directors, the president or a
co-president, the secretary, or any assistant secretary. Unless otherwise
specified therein, such resignation shall take effect upon delivery.

Section 5.05. Chairman of the Board. The chairman of the board, if there be such
an officer, shall be the senior officer of the Corporation, shall preside at all
stockholders' meetings and at all meetings of the board of directors and shall
be ex officio a member of all committees of the board of directors. He shall
have such other powers and perform such other duties as may be assigned to him
from time to time by the board of directors.

Section 5.06. Vice Chairman of the Board. The board of directors may from time
to time elect a vice chairman who shall have such powers and perform such duties
as from time to time may be assigned to him by the board of directors, chairman
of the board or the president or a co-president. At the request of, or in the
absence or in the event of the disability of the chairman of the board, the vice
chairman may perform all the duties of the chairman of the board or the
president or a co-president and, when so acting, shall have all the powers of
and be subject to all the restrictions upon such respective officers.

Section 5.07. President, Co-President. The president or co-presidents shall be
the chief executive officer or co-chief executive officers, as the case may be,
of the Corporation and, in the absence of the chairman of the board or vice
chairman or if no chairman of the board or vice chairman has been chosen, shall
preside at all stockholders' meetings and at all meetings of the board of
directors and shall in general exercise the powers and perform the duties of the
chairman of the board. Subject to the supervision of the board of directors, the
president or the co-presidents shall have general charge of the business,
affairs and property of the Corporation and general supervision over its
officers, employees and agents. Except as the board of directors may otherwise
order, the president or a co-president may sign in the name and on behalf of the
Corporation all deeds, bonds, contracts, or agreements. The president or a
co-president shall exercise such other powers and perform such other duties as
from time to time may be assigned by the board of directors.

Section 5.08. Vice President. The board of directors may from time to time elect
one or more vice presidents (including executive and senior vice presidents) who
shall have such powers and perform such duties as from time to time may be
assigned to them by the board of directors or the president or a co-president.
At the request of, or in the absence or in the event of the disability of, the
president or both co-presidents, the vice president (or, if there are two or
more vice presidents, then the senior of the vice presidents present and able to
act) may perform all the duties of the president or co-presidents and, when so
acting, shall have all the powers of and be subject to all the restrictions upon
the president or co-presidents.

Section 5.09. Treasurer and Assistant Treasurers. The treasurer shall be the
chief accounting officer of the Corporation and shall have general charge of the
finances and books of account of the Corporation. The treasurer shall render to
the board of directors, whenever directed by the board, an account of the
financial condition of the Corporation and of all transactions as treasurer; and
as soon as possible after the close of

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Bull & Bear Funds I, Inc.
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each financial year he shall make and submit to the board of directors a like
report for such financial year. The treasurer shall cause to be prepared
annually a full and complete statement of the affairs of the Corporation,
including a balance sheet and a financial statement of operations for the
preceding fiscal year, which shall be submitted at the annual meeting of
stockholders (when, and if, such meeting is held) and filed within 20 days
thereafter at the principal office of the Corporation in the state of Maryland,
except that for any year when an annual meeting of stockholders is not held,
such statement of affairs shall be filed at the Corporation's principal office
within 120 days after the end of the fiscal year. The treasurer shall perform
all acts incidental to the office of treasurer, subject to the control of the
board of directors.

Any assistant treasurer may perform such duties of the treasurer as the
treasurer or the board of directors may assign, and, in the absence of the
treasurer, may perform all the duties of the treasurer.

Section 5.10. Secretary and Assistant Secretaries. The secretary shall attend to
the giving and serving of all notices of the Corporation and shall record all
proceedings of the meetings of the stockholders and directors in books to be
kept for that purpose. The secretary shall keep in safe custody the seal of the
Corporation, and shall have responsibility for the records of the Corporation,
including the stock books and such other books and papers as the board of
directors may direct and such books, reports, certificates and other documents
required by law to be kept, all of which shall at all reasonable times be open
to inspection by any director. The secretary shall perform such other duties
which appertain to this office or as may be required by the board of directors.

Any assistant secretary may perform such duties of the secretary as the
secretary or the board of directors may assign, and, in the absence of the
secretary, may perform all the duties of the secretary.

Section 5.11. Subordinate Officers. The chairman of the board from time to time
may appoint such other officers or agents as he may deem advisable, each of whom
shall have such title, hold office for such period, have such authority and
perform such duties as the board of directors may determine. The chairman of the
board from time to time may delegate to one or more officers or agents the power
to appoint any such subordinate officers or agents and to prescribe their
respective rights, terms of office, authorities and duties. Any officer or agent
appointed in accordance with the provisions of this Section 5.11 may be removed,
either with or without cause, by any officer upon whom such power of removal
shall have been conferred by the board of directors.

Section 5.12. Remuneration. The salaries or other compensation of the officers
of the Corporation shall be fixed from time to time by resolution of the board
of directors, except that the board of directors may by resolution delegate to
any person or group of persons the power to fix the salaries or other
compensation of any subordinate officers or agents appointed in accordance with
the provisions of Section 5.11 hereof.

Section 5.13. Surety Bonds. The board of directors may require any officer or
agent of the Corporation to execute a bond (including, without limitation, any
bond required by the Investment Company Act of 1940, as amended, and the rules
and regulations of the Securities and Exchange Commission promulgated
thereunder) to the Corporation in such sum and with such surety or sureties as
the board of directors may determine, conditioned upon the faithful performance
of his or her duties to the Corporation, including responsibility for negligence
and for the accounting of any of the Corporation's property, funds or securities
that may come into his hands.

ARTICLE VI
EXECUTION OF INSTRUMENTS, VOTING OF SECURITIES

Section 6.01. General. Subject to the provisions of Sections 5.07, 6.02, and
7.03 hereof, all deeds, documents, transfers, contracts, agreements and other
instruments requiring execution by the Corporation shall be signed by the
president or a co-president, a vice president (including executive and senior
vice presidents), chairman or vice chairman and by the treasurer or secretary or
an assistant treasurer or an assistant secretary, or as the board of directors
may otherwise, from time to time, authorize. Any such authorization may be
general or confined to specific instances.

Section 6.02. Checks, Notes, Drafts, Etc. So long as the Corporation shall
employ a custodian to keep custody of the cash and securities of the
Corporation, all checks and drafts for the payment of money by the Corporation
may be signed in the name of the Corporation by the custodian. Except as
otherwise authorized by the board of directors, all requisitions or orders for
the assignment of securities standing in the name of the custodian or its
nominee, or for the execution of powers to transfer the same, shall be signed in
the name of the Corporation by any two of the following: the president or a
co-president, vice president (including executive and senior vice presidents),
treasurer or an assistant treasurer, provided that no one person may sign in the
capacity of two such officers. Promissory notes, checks or drafts payable to the
Corporation may be endorsed only to the order of the custodian or its nominee
and only by any two of the following: the treasurer, the president or a
co-president, a vice president (including executive and senior vice presidents)
or by such other person or persons as shall be authorized by the board of
directors, provided that no one person may sign in the capacity of two such
officers.

Section 6.03. Voting of Securities. Unless otherwise ordered by the board of
directors, the president or a co-president, or any vice president (including
executive and senior vice presidents) shall have full power and

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Bull & Bear Funds I, Inc.
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authority on behalf of the Corporation to attend and to act and to vote, or in
the name of the Corporation to execute proxies to vote, at any meeting of
stockholders of any company in which the Corporation may hold stock. At any such
meeting such officer shall possess and may exercise (in person or by proxy) any
and all rights, powers and privileges incident to the ownership of such stock.
The board of directors may by resolution from time to time confer like powers
upon any other person or persons in accordance with the laws of the State of
Maryland.

ARTICLE VII
CAPITAL STOCK

Section 7.01. Certificates of Stock. The interest of each stockholder of the
Corporation may be, but shall not be required to be, evidenced by certificates
for shares of stock in such form not inconsistent with the Articles of
Incorporation as the board of directors may from time to time authorize. No
certificate shall be valid unless it is signed in the name of the Corporation by
a president or a co-president or a vice president and countersigned by the
secretary or an assistant secretary or the treasurer or an assistant treasurer
of the Corporation and sealed with the seal of the Corporation, or bears the
facsimile signatures of such officers and a facsimile of such seal. In case any
officer who shall have signed any such certificate, or whose facsimile signature
has been placed thereon, shall cease to be such an officer (because of death,
resignation or otherwise) before such certificate is issued, such certificate
may be issued and delivered by the Corporation with the same effect as if he
were such officer at the date of issue.

The number of each certificate issued, the name and address of the person owning
the shares represented thereby, the number of such shares and the date of
issuance shall be entered upon the stock ledger of the Corporation at the time
of issuance.

Every certificate exchanged, surrendered for redemption or otherwise returned to
the Corporation shall be marked "canceled" with the date of cancellation.

Section 7.02. Transfer of Shares. Shares of the Corporation shall be
transferable on the books of the Corporation by the holder of record thereof (in
person or by his duly authorized attorney or legal representative) (a) if a
certificate or certificates have been issued, upon surrender duly endorsed or
accompanied by proper instruments of assignment and transfer, with such proof of
the authenticity of the signature as the Corporation or its agents may
reasonably require, or (b) as otherwise prescribed by the board of directors.
Except as otherwise provided in the Articles of Incorporation, the shares of
stock of the Corporation may be freely transferred, subject to the charging of
customary transfer fees, and the board of directors may, from time to time,
adopt rules and regulations with reference to the method of transfer of the
shares of stock of the Corporation. The Corporation shall be entitled to treat
the holder of record of any share of stock as the absolute owner thereof for all
purposes, and accordingly shall not be bound to recognize any legal, equitable
or other claim or interest in such share on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise expressly provided by law or the statutes of the State of Maryland.

Section 7.03. Transfer Agents and Registrars. The board of directors may from
time to time appoint or remove transfer agents or registrars of transfers for
shares of stock of the Corporation, and it may appoint the same person as both
transfer agent and registrar. Upon any such appointment being made all
certificates representing shares of capital stock thereafter issued shall be
countersigned by one of such transfer agents or by one of such registrars of
transfers or by both and shall not be valid unless so countersigned. If the same
person shall be both transfer agent and registrar, only one countersignature by
such person shall be required.

Section 7.04. Fixing of Record Date. The board of directors may fix in advance a
date as a record date for the determination of the stockholders entitled to
notice of or to vote at any stockholders' meeting or any adjournment thereof, or
to express consent to corporate action in writing without a meeting, or to
receive payment of any dividend or other distribution or allotment of any
rights, or to exercise any rights in respect of any change, conversion or
exchange of stock, or for the purpose of any other lawful action, provided that
(a) such record date shall be within 90 days prior to the date on which the
particular action requiring such determination will be taken, except that a
meeting of stockholders convened on the date for which it was called may be
adjourned from time to time without further notice to a date not more than 120
days after the original record date; (b) the transfer books shall not be closed
for a period longer than 20 days; and (c) in the case of a meeting of
stockholders, the record date shall be at least 10 days before the date of the
meeting.

Section 7.05. Lost, Stolen or Destroyed Certificates. Before issuing a new
certificate for stock of the Corporation alleged to have been lost, stolen or
destroyed, the board of directors or any officer authorized by the board may, in
its discretion, require the owner of the lost, stolen or destroyed certificate
(or his legal representative) to give the Corporation a bond or other indemnity,
in such form and in such amount as the board or any such officer may direct and
with such surety or sureties as may be satisfactory to the board or any such
officer, sufficient to indemnify the Corporation against any claim that may be
made against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.

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Bull & Bear Funds I, Inc.
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ARTICLE VIII
CONFLICT OF INTEREST TRANSACTIONS

Section 8.01. Validity of Contract or Transactions. In the event that any
officer or director of the Corporation shall have any interest, direct or
indirect, in any other firm, association or corporation as officer, employee,
director or stockholder, no transaction or contract made by the Corporation with
any such other firm, association or corporation shall be valid unless such
interest shall have been disclosed or made known to all of the directors or to a
majority of the directors and such transaction or contract shall have been
approved by a majority of a quorum of directors, which majority shall consist of
directors not having any such interest or a majority of the directors in office,
including directors having such an interest.

Section 8.02. Dealings. No officer, director or employee of the Corporation
shall deal for or on behalf of the Corporation with himself, as principal or
agent, or with any corporation or partnership in which he has a financial
interest, except that:

(a) Such prohibition shall not prevent officers, directors or employees
of the Corporation from having a financial interest in the Corporation,
or the sponsor, or a distributor of the shares of the Corporation, or
the investment manager or counsel of the Corporation;

(b) Such prohibition shall not prevent the purchase of securities for
the portfolio of the Corporation or the sale of securities owned by the
Corporation through a securities broker, one or more of whose partners,
officers or directors is an officer, director or employee of the
Corporation, provided such transactions are handled in the capacity of
broker, only, and provided they are performed in accordance with
applicable law;

(c) Such prohibition shall not prevent the employment of legal counsel,
registrar, transfer agent, dividend disbursing agent, or custodian or
trustee having a partner, officer or director who is an officer,
director or employee of the Corporation, provided only customary fees
are charged for services rendered for the benefit of the Corporation;

(d) Such prohibition shall not prevent the purchase for the portfolio
of the Corporation of securities issued by an issuer having an officer,
director or security holder who is an officer, director or employee of
the Corporation or of the manager or investment counsel of the
Corporation, unless at the time of such purchase one or more of such
officers, directors or employees owns beneficially more than one-half
of one per cent (1/2%) of the shares or securities, or both, of such
issuer and such officers, directors and employees owning more than
one-half of one per cent (1/2%) of such shares or securities together
own beneficially more than five per cent (5%) of such shares or
securities.

ARTICLE IX
FISCAL YEAR AND ACCOUNTANT

Section 9.01. Fiscal Year. The fiscal year of the Corporation shall, unless
otherwise ordered by the board of directors, be twelve calendar months ending on
the 31st day of December.

Section 9.02. Accountant. The Corporation shall employ an independent public
accountant or a firm of independent public accountants as its accountant to
examine the accounts of the Corporation and to sign and certify financial
statements filed by the Corporation. The accountant's certificates and reports
shall be addressed both to the board of directors and to the stockholders. The
employment of the accountant shall be conditioned upon the right of the
Corporation to terminate the employment forthwith without any penalty by vote of
a majority of the outstanding voting securities at any stockholders' meeting
called for that purpose.

A majority of the members of the board of directors who are not "interested
persons" (as defined in the Investment Company Act of 1940, as amended) of the
Corporation shall select the accountant at any meeting held within 90 days
before or after the beginning of the fiscal year of the Corporation or before
the annual stockholders' meeting (if any) in that year. The selection shall be
submitted for ratification or rejection at the next succeeding annual
stockholders' meeting, if any, when and if such meeting is held. If the
selection is rejected at that meeting, the accountant shall be selected by
majority vote of the Corporation's outstanding voting securities, either at the
meeting at which the rejection occurred or at a subsequent meeting of
stockholders called for the purpose of selecting an accountant.

Any vacancy occurring between annual meetings, if any, due to the death or
resignation of the accountant may be filled by the vote of a majority of the
members of the board of directors who are not interested persons.

ARTICLE X
CUSTODY OF SECURITIES

Section 10.01. Employment of a Custodian. Unless otherwise required by law or
the Articles of Incorporation, all securities and cash owned by the Corporation
from time to time shall be deposited with and held by a

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custodian or subcustodian qualified to act as such in accordance with the
requirements of the Investment Company Act of 1940, as amended.

Section 10.02. Termination of Custodian Agreement. Upon termination of the
agreement for services with the custodian or inability of the custodian to
continue to serve, the board of directors shall promptly appoint a successor
custodian, but in the event that no successor custodian can be found who has the
required qualifications and is willing to serve, the board of directors shall
call as promptly as possible a special meeting of the stockholders to determine
whether the Corporation shall function without a custodian or shall be
liquidated. If so directed by resolution of the board of directors or by vote of
the holders of a majority of the outstanding shares of stock of the Corporation,
the custodian shall deliver and pay over all property of the Corporation held by
it as specified in such vote.

Section 10.03. Provisions of Custodian Contract. The board of directors shall
cause to be delivered to the custodian all securities owned by the Corporation
or to which it may become entitled, and shall order the same to be delivered by
the custodian only in completion of a sale, exchange, transfer, pledge, or other
disposition thereof, all as the board of directors may generally or from time to
time require to approve or to a successor custodian; and the board of directors
shall cause all funds owned by the Corporation or to which it may become
entitled to be paid to the custodian, and shall order the same disbursed only
for investment against delivery of the securities acquired, or in payment of
expenses, including management compensation, and liabilities of the Corporation,
including distributions to shareholders, or to a successor custodian.

Section 10.04. Other Arrangements. The Corporation may make such other
arrangements for the custody of its assets (including deposit arrangements) as
may be required by any applicable law, rule or regulation.

ARTICLE XI
INDEMNIFICATION AND INSURANCE

Section 11.01. Indemnification of Officers, Directors, Employees and Agents. In
accordance with applicable law, including the Investment Company Act of 1940, as
amended, and Maryland Corporate law, the Corporation shall indemnify each person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative ("Proceeding"), by reason of the fact that he or
she is or was a director, officer, employee, or agent of the Corporation, or is
or was serving at the request of the Corporation as a director, officer,
employee, partner, trustee or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against all reasonable expenses (including
attorneys' fees) actually incurred, and judgments, fines, penalties and amounts
paid in settlement in connection with such Proceeding to the maximum extent
permitted by law, now existing or hereafter adopted. Notwithstanding the
foregoing, the following provisions shall apply with respect to indemnification
of the Corporation's directors, officers, and investment manager (as defined in
the Investment Company Act of 1940, as amended):

(a) Whether or not there is an adjudication of liability in such
Proceeding, the Corporation shall not indemnify any such person for any
liability arising by reason of such person's willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved
in the conduct of his or her office or under any contract or agreement
with the Corporation ("disabling conduct").

(b) The Corporation shall not indemnify any such person unless:

(1) the court or other body before which the Proceeding was
brought (a) dismisses the Proceeding for insufficiency of
evidence of any disabling conduct, or (b) reaches a final
decision on the merits that such person was not liable by
reason of disabling conduct; or

(2) absent such a decision, a reasonable determination is
made, based upon a review of the facts, by (a) the vote of a
majority of a quorum of the directors of the Corporation who
are neither interested persons of the Corporation as defined
in the Investment Company Act of 1940, as amended, nor parties
to the Proceeding, or (b) if such quorum is not obtainable, or
even if obtainable, if a majority of a quorum of directors
described above so directs, based upon a written opinion by
independent legal counsel, that such person was not liable by
reason of disabling conduct.

(c) Reasonable expenses (including attorneys' fees) incurred in
defending a Proceeding involving any such person will be paid by the
Corporation in advance of the final disposition thereof upon an
undertaking by such person to repay such expenses unless it is
ultimately determined that he or she is entitled to indemnification,
if:

(1) such person shall provide adequate security for his or
her undertaking;

(2) the Corporation shall be insured against losses arising by
reason of such advance; or

(3) a majority of a quorum of the directors of the Corporation
who are neither interested persons of the Corporation as
defined in the Investment Company Act of 1940, as amended, nor

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parties to the Proceeding, or independent legal counsel in a
written opinion, shall determine, based on a review of readily
available facts, that there is reason to believe that such
person will be found to be entitled to indemnification.

Section 11.02. Insurance of Officers, Directors, Employees and Agents. The
Corporation may purchase and maintain insurance or other sources of
reimbursement to the extent permitted by law on behalf of any person who is or
was a director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee,
partner, trustee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against him or her and
incurred by him or her in or arising out of his position.

Section 11.03. Non-exclusivity. The indemnification and advancement of expenses
provided by, or granted pursuant to, this Article XI shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under the Articles of Incorporation,
these By-Laws, agreement, vote of stockholders or directors, or otherwise, both
as to action in his or her official capacity and as to action in another
capacity while holding such office.

Section 11.04. Amendment. No amendment, alteration or repeal of this Article or
the adoption, alteration or amendment of any other provisions to the Articles of
Incorporation or By-laws inconsistent with this Article shall adversely affect
any right or protection of any person under this Article with respect to any act
or failure to act which occurred prior to such amendment, alteration, repeal or
adoption.

ARTICLE XII
AMENDMENTS

Section 12.01. General. Except as provided in Section 12.02 of this Article XII
and subject to the provisions concerning stockholder voting in Article II
hereof, all By-laws of the Corporation, whether adopted by the board of
directors or the stockholders, shall be subject to amendment, alteration or
repeal, and new By-laws may be made by the affirmative vote of either: (a) the
holders of record of a majority of the outstanding shares of stock of the
Corporation entitled to vote, at any meeting, the notice or waiver of notice of
which shall have specified or summarized the proposed amendment, alteration,
repeal or new By-law; or (b) a majority of directors, at any meeting the notice
or waiver of notice of which shall have specified or summarized the proposed
amendment, alteration, repeal or new By-law.

Section 12.02. By Stockholders Only. No amendment of any section of these
By-laws shall be made except by the stockholders of the Corporation if the
By-laws provide that such section may not be amended, altered or repealed except
by the stockholders. From and after the issuance of any shares of the capital
stock of the Corporation no amendment, alteration or repeal of this Article XII
shall be made except by the stockholders of the Corporation.

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[DESCRIPTION] AMENDED BY-LAWS
Bull & Bear Funds II, Inc.
By-laws As Amended December 11, 1997

AMENDED BY-LAWS

BULL & BEAR FUNDS II, INC.

A MARYLAND CORPORATION

DECEMBER 11, 1997

<PAGE>

Bull & Bear Funds II, Inc.
By-laws As Amended December 11, 1997

AMENDED BY-LAWS
TABLE OF CONTENTS
PAGE

<PAGE>

Bull & Bear Funds II, Inc.
By-laws As Amended December 11, 1997

<PAGE>

Bull & Bear Funds II, Inc.
By-laws As Amended December 11, 1997

AMENDED BY-LAWS
OF

BULL & BEAR FUNDS II, INC.

(A MARYLAND CORPORATION)

ARTICLE I
NAME OF CORPORATION, LOCATION OF
OFFICES AND SEAL

Section 1.01. Name. The name of the Corporation is Bull & Bear Funds II, Inc.

ARTICLE II
STOCKHOLDERS

Irregularities in the notice of any meeting to, or the nonreceipt of any such
notice by, any of the stockholders shall not invalidate any action otherwise
properly taken by or at any such meeting.

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Bull & Bear Funds II, Inc.
By-laws As Amended December 11, 1997

ARTICLE III
BOARD OF DIRECTORS

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Bull & Bear Funds II, Inc.
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(b) the Corporation's net income so determined for the current or
preceding fiscal year.

Such statement shall adequately disclose the source or sources of such payment
and the basis of calculation, and shall be in such form as the Securities and
Exchange Commission may prescribe.

Directors need not be stockholders of the Corporation.

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Bull & Bear Funds II, Inc.
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all persons participating in the meeting to hear each other at the same time;
and participation by such means shall constitute presence in person at a
meeting.

Section 3.12. Compensation of Directors. Directors may receive such
compensation for their services as may from time to time be determined by
resolution of the board of directors.

ARTICLE IV
COMMITTEES

- 4 -

<PAGE>

Bull & Bear Funds II, Inc.
By-laws As Amended December 11, 1997

ARTICLE V
OFFICERS

- 5 -

<PAGE>

Bull & Bear Funds II, Inc.
By-laws As Amended December 11, 1997

ARTICLE VI
EXECUTION OF INSTRUMENTS, VOTING OF SECURITIES

- 6 -

<PAGE>

Bull & Bear Funds II, Inc.
By-laws As Amended December 11, 1997

ARTICLE VII
CAPITAL STOCK

Every certificate exchanged, surrendered for redemption or otherwise returned to
the Corporation shall be marked "canceled" with the date of cancellation.

- 7 -

<PAGE>

Bull & Bear Funds II, Inc.
By-laws As Amended December 11, 1997

ARTICLE VIII
CONFLICT OF INTEREST TRANSACTIONS

ARTICLE IX
FISCAL YEAR AND ACCOUNTANT

Section 9.01. Fiscal Year. The fiscal year of the Corporation shall, unless
otherwise ordered by the board of directors, be twelve calendar months ending on
the 31st day of December.

ARTICLE X
CUSTODY OF SECURITIES

- 8 -

<PAGE>

Bull & Bear Funds II, Inc.
By-laws As Amended December 11, 1997

custodian or subcustodian qualified to act as such in accordance with the
requirements of the Investment Company Act of 1940, as amended.

ARTICLE XI
INDEMNIFICATION AND INSURANCE

(b) The Corporation shall not indemnify any such person unless:

(1) such person shall provide adequate security for his or
her undertaking;

(2) the Corporation shall be insured against losses arising by
reason of such advance; or

(3) a majority of a quorum of the directors of the Corporation
who are neither interested persons of the Corporation as
defined in the Investment Company Act of 1940, as amended, nor

- 9 -

<PAGE>

Bull & Bear Funds II, Inc.
By-laws As Amended December 11, 1997

ARTICLE XII
AMENDMENTS

- 10 -

[DESCRIPTION] AMENDED BY-LAWS

Bull & Bear Gold Investors, Ltd.
By-laws As Amended December 11, 1997

AMENDED BY-LAWS

BULL & BEAR GOLD INVESTORS, LTD.

A MARYLAND CORPORATION

DECEMBER 11, 1997

<PAGE>

Bull & Bear Gold Investors, Ltd.
By-laws As Amended December 11, 1997

AMENDED BY-LAWS
TABLE OF CONTENTS
PAGE

<PAGE>

Bull & Bear Gold Investors, Ltd.
By-laws As Amended December 11, 1997

<PAGE>

Bull & Bear Gold Investors, Ltd.
By-laws As Amended December 11, 1997

AMENDED BY-LAWS
OF

BULL & BEAR GOLD INVESTORS, LTD.

(A MARYLAND CORPORATION)

ARTICLE I
NAME OF CORPORATION, LOCATION OF
OFFICES AND SEAL

Section 1.01. Name. The name of the Corporation is Bull & Bear Gold Investors,
Ltd.

ARTICLE II
STOCKHOLDERS

Irregularities in the notice of any meeting to, or the nonreceipt of any such
notice by, any of the stockholders shall not invalidate any action otherwise
properly taken by or at any such meeting.

- 1 -

<PAGE>

Bull & Bear Gold Investors, Ltd.
By-laws As Amended December 11, 1997

ARTICLE III
BOARD OF DIRECTORS

- 2 -

<PAGE>

Bull & Bear Gold Investors, Ltd.
By-laws As Amended December 11, 1997

(b) the Corporation's net income so determined for the current or
preceding fiscal year.

Such statement shall adequately disclose the source or sources of such payment
and the basis of calculation, and shall be in such form as the Securities and
Exchange Commission may prescribe.

Directors need not be stockholders of the Corporation.

- 3 -

<PAGE>

Bull & Bear Gold Investors, Ltd.
By-laws As Amended December 11, 1997

all persons participating in the meeting to hear each other at the same time;
and participation by such means shall constitute presence in person at a
meeting.

Section 3.12. Compensation of Directors. Directors may receive such
compensation for their services as may from time to time be determined by
resolution of the board of directors.

ARTICLE IV
COMMITTEES

- 4 -

<PAGE>

Bull & Bear Gold Investors, Ltd.
By-laws As Amended December 11, 1997

ARTICLE V
OFFICERS

- 5 -

<PAGE>

Bull & Bear Gold Investors, Ltd.
By-laws As Amended December 11, 1997

ARTICLE VI
EXECUTION OF INSTRUMENTS, VOTING OF SECURITIES

- 6 -

<PAGE>

Bull & Bear Gold Investors, Ltd.
By-laws As Amended December 11, 1997

ARTICLE VII
CAPITAL STOCK

Every certificate exchanged, surrendered for redemption or otherwise returned to
the Corporation shall be marked "canceled" with the date of cancellation.

- 7 -

<PAGE>

Bull & Bear Gold Investors, Ltd.
By-laws As Amended December 11, 1997

ARTICLE VIII
CONFLICT OF INTEREST TRANSACTIONS

ARTICLE IX
FISCAL YEAR AND ACCOUNTANT

Section 9.01. Fiscal Year. The fiscal year of the Corporation shall, unless
otherwise ordered by the board of directors, be twelve calendar months ending on
the 31st day of December.

ARTICLE X
CUSTODY OF SECURITIES

- 8 -

<PAGE>

Bull & Bear Gold Investors, Ltd.
By-laws As Amended December 11, 1997

custodian or subcustodian qualified to act as such in accordance with the
requirements of the Investment Company Act of 1940, as amended.

ARTICLE XI
INDEMNIFICATION AND INSURANCE

(b) The Corporation shall not indemnify any such person unless:

(1) such person shall provide adequate security for his or
her undertaking;

(2) the Corporation shall be insured against losses arising by
reason of such advance; or

(3) a majority of a quorum of the directors of the Corporation
who are neither interested persons of the Corporation as
defined in the Investment Company Act of 1940, as amended, nor

- 9 -

<PAGE>

Bull & Bear Gold Investors, Ltd.
By-laws As Amended December 11, 1997

ARTICLE XII
AMENDMENTS

- 10 -

[DESCRIPTION] AMENDED BY-LAWS

Bull & Bear Special Equities Fund, Inc.
By-laws As Amended December 11, 1997

AMENDED BY-LAWS

BULL & BEAR SPECIAL EQUITIES FUND, INC.

A MARYLAND CORPORATION

DECEMBER 11, 1997

<PAGE>

Bull & Bear Special Equities Fund, Inc.
By-laws As Amended December 11, 1997

AMENDED BY-LAWS
TABLE OF CONTENTS
PAGE

<PAGE>

Bull & Bear Special Equities Fund, Inc.
By-laws As Amended December 11, 1997

<PAGE>

Bull & Bear Special Equities Fund, Inc.
By-laws As Amended December 11, 1997

AMENDED BY-LAWS
OF

BULL & BEAR SPECIAL EQUITIES FUND, INC.

(A MARYLAND CORPORATION)

ARTICLE I
NAME OF CORPORATION, LOCATION OF
OFFICES AND SEAL

Section 1.01. Name. The name of the Corporation is Bull & Bear Special
Equities Fund, Inc.

ARTICLE II
STOCKHOLDERS

Irregularities in the notice of any meeting to, or the nonreceipt of any such
notice by, any of the stockholders shall not invalidate any action otherwise
properly taken by or at any such meeting.

- 1 -

<PAGE>

Bull & Bear Special Equities Fund, Inc.
By-laws As Amended December 11, 1997

ARTICLE III
BOARD OF DIRECTORS

- 2 -

<PAGE>

Bull & Bear Special Equities Fund, Inc.
By-laws As Amended December 11, 1997

(b) the Corporation's net income so determined for the current or
preceding fiscal year.

Such statement shall adequately disclose the source or sources of such payment
and the basis of calculation, and shall be in such form as the Securities and
Exchange Commission may prescribe.

Directors need not be stockholders of the Corporation.

- 3 -

<PAGE>

Bull & Bear Special Equities Fund, Inc.
By-laws As Amended December 11, 1997

all persons participating in the meeting to hear each other at the same time;
and participation by such means shall constitute presence in person at a
meeting.

Section 3.12. Compensation of Directors. Directors may receive such
compensation for their services as may from time to time be determined by
resolution of the board of directors.

ARTICLE IV
COMMITTEES

- 4 -

<PAGE>

Bull & Bear Special Equities Fund, Inc.
By-laws As Amended December 11, 1997

ARTICLE V
OFFICERS

- 5 -

<PAGE>

Bull & Bear Special Equities Fund, Inc.
By-laws As Amended December 11, 1997

ARTICLE VI
EXECUTION OF INSTRUMENTS, VOTING OF SECURITIES

- 6 -

<PAGE>

Bull & Bear Special Equities Fund, Inc.
By-laws As Amended December 11, 1997

ARTICLE VII
CAPITAL STOCK

Every certificate exchanged, surrendered for redemption or otherwise returned to
the Corporation shall be marked "canceled" with the date of cancellation.

- 7 -

<PAGE>

Bull & Bear Special Equities Fund, Inc.
By-laws As Amended December 11, 1997

ARTICLE VIII
CONFLICT OF INTEREST TRANSACTIONS

ARTICLE IX
FISCAL YEAR AND ACCOUNTANT

Section 9.01. Fiscal Year. The fiscal year of the Corporation shall, unless
otherwise ordered by the board of directors, be twelve calendar months ending on
the 31st day of December.

ARTICLE X
CUSTODY OF SECURITIES

- 8 -

<PAGE>

Bull & Bear Special Equities Fund, Inc.
By-laws As Amended December 11, 1997

custodian or subcustodian qualified to act as such in accordance with the
requirements of the Investment Company Act of 1940, as amended.

ARTICLE XI
INDEMNIFICATION AND INSURANCE

(b) The Corporation shall not indemnify any such person unless:

(1) such person shall provide adequate security for his or
her undertaking;

(2) the Corporation shall be insured against losses arising by
reason of such advance; or

(3) a majority of a quorum of the directors of the Corporation
who are neither interested persons of the Corporation as
defined in the Investment Company Act of 1940, as amended, nor

- 9 -

<PAGE>

Bull & Bear Special Equities Fund, Inc.
By-laws As Amended December 11, 1997

ARTICLE XII
AMENDMENTS

- 10 -

[DESCRIPTION] AMENDED BY-LAWS

Midas Fund, Inc.
By-laws As Amended December 11, 1997

AMENDED BY-LAWS

MIDAS FUND, INC.

A MARYLAND CORPORATION

DECEMBER 11, 1997

<PAGE>

Midas Fund, Inc.
By-laws As Amended December 11, 1997

AMENDED BY-LAWS
TABLE OF CONTENTS
PAGE

<PAGE>

Midas Fund, Inc.
By-laws As Amended December 11, 1997

<PAGE>

Midas Fund, Inc.
By-laws As Amended December 11, 1997

AMENDED BY-LAWS
OF

MIDAS FUND, INC.

(A MARYLAND CORPORATION)

ARTICLE I
NAME OF CORPORATION, LOCATION OF
OFFICES AND SEAL

Section 1.01. Name. The name of the Corporation is Midas Fund, Inc.

ARTICLE II
STOCKHOLDERS

Irregularities in the notice of any meeting to, or the nonreceipt of any such
notice by, any of the stockholders shall not invalidate any action otherwise
properly taken by or at any such meeting.

- 1 -

<PAGE>

Midas Fund, Inc.
By-laws As Amended December 11, 1997

ARTICLE III
BOARD OF DIRECTORS

- 2 -

<PAGE>

Midas Fund, Inc.
By-laws As Amended December 11, 1997

(b) the Corporation's net income so determined for the current or
preceding fiscal year.

Such statement shall adequately disclose the source or sources of such payment
and the basis of calculation, and shall be in such form as the Securities and
Exchange Commission may prescribe.

Directors need not be stockholders of the Corporation.

- 3 -

<PAGE>

Midas Fund, Inc.
By-laws As Amended December 11, 1997

all persons participating in the meeting to hear each other at the same time;
and participation by such means shall constitute presence in person at a
meeting.

Section 3.12. Compensation of Directors. Directors may receive such
compensation for their services as may from time to time be determined by
resolution of the board of directors.

ARTICLE IV
COMMITTEES

- 4 -

<PAGE>

Midas Fund, Inc.
By-laws As Amended December 11, 1997

ARTICLE V
OFFICERS

- 5 -

<PAGE>

Midas Fund, Inc.
By-laws As Amended December 11, 1997

ARTICLE VI
EXECUTION OF INSTRUMENTS, VOTING OF SECURITIES

- 6 -

<PAGE>

Midas Fund, Inc.
By-laws As Amended December 11, 1997

ARTICLE VII
CAPITAL STOCK

Every certificate exchanged, surrendered for redemption or otherwise returned to
the Corporation shall be marked "canceled" with the date of cancellation.

- 7 -

<PAGE>

Midas Fund, Inc.
By-laws As Amended December 11, 1997

ARTICLE VIII
CONFLICT OF INTEREST TRANSACTIONS

ARTICLE IX
FISCAL YEAR AND ACCOUNTANT

Section 9.01. Fiscal Year. The fiscal year of the Corporation shall, unless
otherwise ordered by the board of directors, be twelve calendar months ending on
the 31st day of December.

ARTICLE X
CUSTODY OF SECURITIES

- 8 -

<PAGE>

Midas Fund, Inc.
By-laws As Amended December 11, 1997

custodian or subcustodian qualified to act as such in accordance with the
requirements of the Investment Company Act of 1940, as amended.

ARTICLE XI
INDEMNIFICATION AND INSURANCE

(b) The Corporation shall not indemnify any such person unless:

(1) such person shall provide adequate security for his or
her undertaking;

(2) the Corporation shall be insured against losses arising by
reason of such advance; or

(3) a majority of a quorum of the directors of the Corporation
who are neither interested persons of the Corporation as
defined in the Investment Company Act of 1940, as amended, nor

- 9 -

<PAGE>

Midas Fund, Inc.
By-laws As Amended December 11, 1997

ARTICLE XII
AMENDMENTS

- 10 -

/TEXT>